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What Awaits Lincoln National (LNC) This Earnings Season?


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Lincoln National Corp.LNC is scheduled to report first-quarter 2018 results on May 2, after market close.

In the company's Retirement Plan Services segment, strategies to improve wholesaler productivity, initiatives to increase employee contributions and investments into customer experience remain the key drivers of the solid momentum. On the back of these initiatives, we expect to see growth in deposits, net flows, assets and earnings. The Zacks Consensus Estimate for operating income from this segment is $42 million.

We expect an increase in total Life Insurance sales in the first quarter from higher Executive Benefit sales and gains in Variable Universal Life and term products, combined with continued strong demand for MoneyGuard.

Moreover, a more favorable macro backdrop is allowing the company to improve its competitive position in Universal Life and Individual Universal Life. This will help in sales diversification and growth. The Zacks Consensus Estimate for Life Insurance is $125 million.

In the company's Annuities business, we expect higher sales of both fixed and variable annuities, led by strategies laid out to restore annuity sales by combining product actions and distribution effectiveness.

Also, the tax reform will benefit Lincoln National's margin. Its balance sheet strength and solid capital generation, which enables it to buy back shares, will provide an extra support to the bottom line.

Earnings Surprise

The company boasts an attractive earnings surprise history. It beat estimates in each of the four reported quarters, with an average positive surprise of 9.46%

Lincoln National Corporation Price and EPS Surprise

Lincoln National Corporation Price and EPS Surprise | Lincoln National Corporation Quote



Here is what our quantitative model predicts:

Our proven model does not conclusively show that Lincoln National is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Zacks ESP: Lincoln National has an Earning ESP of 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Lincoln National carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies from the insurance sector that you may want to consider as these have the right combination of elements to beat on earnings this quarter:

American Financial Group, Inc. AFG is expected to report first-quarter 2018 earnings results on May 2. The company has an Earnings ESP of +4.46% and a Zacks Rank #2. You can seeĀ  the complete list of today's Zacks #1 Rank stocks here .

National General Holdings Corp NGHC is expected to report first-quarter 2018 earnings results on May 7. The company has an Earnings ESP of +5.59% and a Zacks Rank #1.

American Equity Investment Life Holding Company AEL has an Earnings ESP of +5.99% and a Zacks Rank #3. The company is expected to report first-quarter earnings results on May 2.

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Lincoln National Corporation (LNC): Free Stock Analysis Report

American Equity Investment Life Holding Company (AEL): Free Stock Analysis Report

American Financial Group, Inc. (AFG): Free Stock Analysis Report

National General Holdings Corp (NGHC): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: LNC , AEL , AFG , NGHC



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