Friday, FBR Capital Markets initiated coverage of Lincoln National Corp. (LNC) stock with an Outperform rating and a price target of $35.
Analyst Randy Binner noted that Lincoln is a diversified provider of life insurance and retirement services, with the long-term potential to grow by serving the aging population. Despite improvements in credit spreads, capital, and variable annuity guarantee exposures, Lincoln remains a levered macroeconomic play, in the analyst's view.
However, the analyst believes that Lincoln is adequately capitalized against credit exposures, has a good mix of stable operating segments and retirement segment growth potential, and offers a better risk-adjusted return relative to peers.
Based on the analyst's proprietary credit analysis, he estimates after-tax credit losses for Lincoln of $2.0 billion for the remainder of the credit cycle, or 3.0% of the portfolio, compared with 2.8% for peers.
The analyst estimates excess capital at $3.0 billion. The analyst views this $1 billion capital buffer between credit exposure and capital as available to repay the $950 million CPP obligation. Lincoln should be able to maintain a year-end 2010 RBC ratio of 350%-400% while repaying CPP.
The analyst believes that Lincoln may gradually seek to average its way into a macro hedge, while preserving the 3 Greek approach, as a large macro hedge could be expensive. With the S&P 500 above 1,000, this strategy has likely worked but may leave Lincoln exposed to a major equity market sell-off.
Currently, LNC is down $0.25 or 0.95% and trading at $26.17.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.