Core Insights - Lincoln National Corporation (LNC) is well-positioned for growth, driven by strong performance in its Annuities and Group Protection segments, new product introductions, effective expense management, and a solid financial foundation [1][10] - LNC's stock has increased by 29.4% year-to-date, significantly outperforming the industry's average gain of 1.2% [1][11] Company Overview - Headquartered in Radnor, PA, Lincoln National has a market capitalization of $7.8 billion and operates in diversified life insurance and investment management, offering a range of products across four segments: Annuities, Life Insurance, Group Protection, and Retirement Plan Services [2] - The company's trailing 12-month price-to-book (P/B) ratio is 0.91X, lower than the industry average of 1.93X [2] Financial Performance and Estimates - The Zacks Consensus Estimate for LNC's 2025 earnings is $7.48 per share, reflecting a 5.8% year-over-year increase, with revenues estimated at $18.9 billion [4] - LNC has consistently beaten earnings estimates in the past four quarters, with an average surprise of 15.7% [4] Revenue Growth Drivers - LNC's revenue growth is supported by a balanced business mix, increased insurance premiums, and fee income [5] - The annuity segment's total sales grew by 17.2% year-over-year to $7.8 billion in the first half of 2025, with a shift towards a more balanced mix of spread-based products [6] - The Group Protection segment saw a 30.5% year-over-year increase in income from operations in the first half of 2025, with improved underwriting results and an operating margin increase of 180 basis points [7] Strategic Initiatives - Lincoln National aims to enhance future growth by strengthening distribution leadership and expanding into broader markets, focusing on a customer-first model [8] - The company is enhancing core capital generation by allocating resources to strengthen competitive advantages and drive long-term growth in free cash flow [9] Financial Stability - As of June 30, 2025, LNC had $7.1 billion in cash and invested cash, a 23.1% increase from the end of 2024, indicating a strong financial position [10] - The company's dividend yield stands at 4.4%, higher than the industry's average of 3.3% [10]

Industry Overview - The Zacks Life Insurance industry includes companies providing life insurance coverage and retirement benefits, with products such as annuities, whole and term life insurance, and health insurance [2] - The life insurance market is projected to grow, with gross written premiums expected to reach $1.34 trillion by 2025, driven by increasing demand for protection products and retirement benefits due to a rising number of baby boomers [2] - The industry is experiencing accelerated technology adoption, although rising mortality trends may impact profitability [2] Trends Impacting the Industry - The Federal Reserve has lowered interest rates by 25 basis points to a range of 4%-4.25%, with indications of further cuts, which may challenge life insurers as they invest premiums to meet guaranteed obligations [3][4] - Life insurance sales are expected to grow by 2%-6% in 2025, with new annualized premium growth across various life insurance products [3] - Insurers are redesigning products to focus on bundled covers that provide living benefits, reflecting customer preferences [4] Technological Advancements - The U.S. life insurance market is shifting towards digital platforms, with insurers leveraging AI and machine learning for customized coverages and premium calculations [5] - Increased automation is anticipated to enhance premium growth and operational efficiency, while also helping to manage costs [5] Industry Performance - The Zacks Life Insurance industry currently holds a Zacks Industry Rank of 73, placing it in the top 30% of 255 Zacks industries, indicating strong near-term prospects [7][8] - Year-to-date, the Life Insurance industry has underperformed compared to the Finance sector and the S&P 500, with a collective gain of 0.1% against 14.7% and 13.8% respectively [9] Valuation Metrics - The industry is trading at a trailing 12-month price-to-book (P/B) ratio of 1.91X, compared to the S&P 500's 8.7X and the Finance sector's 4.36X [11] Company Highlights - **Aviva**: Expected earnings growth of 23.6% and 13.2% for 2025 and 2026 respectively, with a strong performance across all business lines [16][17] - **Primerica**: Anticipated earnings growth of 8.1% and 8.5% for 2025 and 2026, benefiting from strong demand for protection products [20][21] - **Lincoln Financial**: Projected earnings growth of 5.8% and 3.2% for 2025 and 2026, supported by a recovering Group Protection business [24][25] - **Voya Financial**: Expected earnings growth of 26.3% for 2025, driven by a focus on high-growth, capital-light businesses [28][29] - **Jackson Financial**: Anticipated earnings growth of 8.8% and 8.6% for 2025 and 2026, with a strong focus on diversified product sales [32][33]

Core Insights - Financial wellness support is becoming a crucial factor for companies in attracting and retaining top talent amid rising debt and cost-of-living challenges [1] Group 1: Research Findings - Lincoln Financial's Wellness@Work research study includes insights from over 2,500 full-time workers across various industries and generations [1] - The study explores perceptions related to retirement readiness and employee benefits [1]

Core Insights - Momentum investing contrasts with the traditional "buy low and sell high" strategy, focusing instead on "buying high and selling higher" to capitalize on fast-moving stocks [1] - Identifying the right entry point for momentum stocks is challenging, as they can lose momentum if their valuations exceed future growth potential [1] Group 1: Momentum Investing Strategy - A safer approach involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [2] - Lincoln National (LNC) is highlighted as a strong candidate for momentum investing, showing a four-week price change of 3.9% [3] - LNC has demonstrated significant long-term momentum, gaining 27.7% over the past 12 weeks, with a beta of 1.48 indicating higher volatility compared to the market [4] Group 2: Valuation and Earnings Estimates - LNC has a Momentum Score of A, suggesting it is an opportune time to invest in the stock for potential gains [5] - The stock has received a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [6] - LNC is trading at a Price-to-Sales ratio of 0.45, indicating it is undervalued, as investors pay only 45 cents for each dollar of sales [6] Group 3: Additional Opportunities - Besides LNC, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [7] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [8]

Core Insights - The logistics sector has seen significant engagement from investors, particularly in the ASEAN and US markets, highlighting its growth potential [1] - The popularity of insurance companies in the Philippines has influenced investment strategies, leading to diversification beyond traditional savings [1] - The trend of investing in blue-chip companies has evolved, with a broader portfolio now including various industries and market capitalizations [1] Investment Focus - The current investment focus includes banks, telecommunications, logistics, and hotels, indicating a diversified approach to portfolio management [1] - The entry into the US market has expanded investment opportunities, particularly in sectors like banking, hotels, shipping, and logistics [1] Market Engagement - The use of platforms like Seeking Alpha has enhanced market analysis and comparison between different regions, particularly between the US and Philippine markets [1] - The experience of acting as a personal broker has provided deeper insights into the US market dynamics, facilitating informed investment decisions [1]

Core Insights - Lincoln Financial has launched a new private market fund called the Lincoln Bain Capital Total Credit Fund in partnership with Bain Capital [1] - The fund is designed to provide a globally diversified portfolio of private credit investments, targeting loans to mid-sized private companies and asset-based financing [1] Company Overview - Lincoln Financial is a prominent provider of insurance, annuities, group benefits, and retirement solutions [1] - The collaboration with Bain Capital highlights Lincoln Financial's strategy to expand its investment offerings in the private credit market [1] Fund Details - The Lincoln Bain Capital Total Credit Fund is characterized as an evergreen fund, indicating it will have a continuous investment strategy [1] - The fund aims to cater to a diverse range of private credit investments, enhancing Lincoln Financial's portfolio [1]

Core Insights - Lincoln National Corporation (LNC) reported second-quarter adjusted earnings per share of $2.36, exceeding the Zacks Consensus Estimate by 23.6% and reflecting a year-over-year increase of 28.3% [1][8] - Adjusted operating revenues rose 4.4% year over year to $4.7 billion, surpassing the consensus mark by 1.2% [1][8] Financial Performance - The strong quarterly results were driven by higher insurance premiums, strong annuity deposits, and solid Group Protection performance [2] - Insurance premiums increased by 3.5% year over year to $1.7 billion, slightly above the Zacks Consensus Estimate [3] - Net investment income grew by 10.1% year over year to $1.5 billion, beating the consensus estimate of $1.4 billion [3][8] - Total expenses decreased by 21.2% year over year to $3.2 billion [4][8] - Lincoln National generated a net income of $699 million, down from $895 million in the prior-year quarter [4] Segment Performance - The Annuities segment's operating income was $287 million, a 3% decline year over year, but above the consensus estimate [6] - The Life Insurance unit reported an operating income of $32 million, improving from a loss of $35 million in the prior year [7] - The Group Protection segment's operating income increased by 33.1% year over year to $173 million, exceeding the Zacks Consensus Estimate [8] - The Retirement Plan Services segment recorded an operating income of $37 million, down 8% year over year [10] Financial Position - As of June 30, 2025, Lincoln National had cash and invested cash of $7.1 billion, up from $5.8 billion at the end of 2024 [12] - Total assets increased to $399.1 billion from $390.8 billion at the end of 2024 [12] - Long-term debt decreased to $5.8 billion from $7.1 billion as of December 31, 2024 [12] - Total stockholders' equity rose to $9.5 billion from $8.3 billion at the end of 2024 [12] Outlook - The Group Protection unit is expected to experience a seasonally higher loss ratio in the fourth quarter of 2025 [15] - The Life Insurance segment is forecasted to see favorable mortality results in the third and fourth quarters of 2025 [15] - In 2026, the Annuities, Life Insurance, Group Protection, and Retirement Plan Services units are projected to account for 55-65%, 10-15%, 20-30%, and 5-15% of total operating income, respectively [16]

Core Viewpoint - Lincoln National Corporation (NYSE: LNC) has shown moderate performance over the past year, with a 7% increase in share price and a nearly 5% dividend yield, following a period of significant underperformance [1] Company Performance - The company has taken meaningful actions to improve its performance after several years of underperformance [1] Investment Strategy - The article emphasizes a contrarian investment approach based on macro views and stock-specific turnaround stories to achieve outsized returns with a favorable risk/reward profile [1]

Core Insights - Lincoln National reported non-GAAP earnings per share of $2.36 for Q2 2025, exceeding analyst expectations by 25.5% [1] - Non-GAAP revenue was $4.308 billion, falling short of the consensus estimate of $4.66 billion by 7.6% [1] - The company showed improved operating margins, particularly in the Group Protection segment, which reached an operating margin of 12.5% [1] Financial Performance - Non-GAAP EPS increased by 26.2% year-over-year from $1.87 in Q2 2024 [2] - GAAP revenue decreased by 21.5% from $5.15 billion in Q2 2024 to $4.04 billion in Q2 2025 [2] - GAAP net income per diluted share fell by 25.6% from $5.11 in Q2 2024 to $3.80 in Q2 2025 [2] - Adjusted operating income (non-GAAP) rose to $427 million, a 31.8% increase from $324 million in the prior year [2] Business Segments Overview - Lincoln National operates through four segments: Annuities, Life Insurance, Group Protection, and Retirement Plan Services [3] - The Annuities segment reported operating income of $287 million, a 3% decline year-over-year, with sales growing 5% to $4.0 billion [6] - Life Insurance segment reversed a prior year loss, reporting operating income of $32 million, with sales increasing 15% to $121 million [7] - Group Protection achieved record operating income of $173 million, a 33% increase year-over-year, with premiums rising to $1.4 billion [8] - Retirement Plan Services saw operating income fall by 8% to $37 million, despite a 9.5% increase in deposits to $3.6 billion [9] Strategic Initiatives - The company is focusing on diversifying earnings sources, controlling expenses, and improving capital flexibility [4] - Distribution efficiency and product innovation are key priorities, with recent partnerships aimed at boosting sales and innovation [10] - A partnership with Bain Capital was established to manage at least $20 billion in assets over six years, enhancing investment capabilities [12] Risk Management and Financial Strength - Lincoln National maintained a risk-based capital (RBC) ratio above 420%, exceeding its 400% target [11] - Holding company liquidity was steady at $466 million as of Q2 2025, with net unrealized losses in available-for-sale securities narrowing by $1.4 billion year-over-year [12] - No material changes were reported in the company's financial strength ratings, with stable outlooks from major rating agencies [13] Future Outlook - Management did not provide formal financial guidance for the upcoming quarters but emphasized a disciplined approach to capital and risk-adjusted returns [14] - Investors are advised to monitor future net flow metrics in Annuities and Retirement Plan Services, as sustained outflows could impact profitability [15]

Financial Performance - As of June 30, 2025, Lincoln National Corporation reported consolidated net income of $X million, reflecting a Y% increase compared to the same period in 2024[242]. - As of June 30, 2025, the company reported a net income of $699 million, a decrease from $895 million in the same period of 2024[294]. - For the three months ended June 30, 2025, annuity income was $287 million, down from $297 million in 2024, while life insurance income improved to $32 million from a loss of $35 million[294]. - For the three months ended June 30, 2025, total operating revenues increased to $1,602 million, up from $1,511 million in 2024, representing a growth of 6.0%[313]. - Net investment income for the six months ended June 30, 2025, was $1,172 million, compared to $1,114 million in 2024, reflecting a 5.2% increase driven by higher investment income on alternative investments[325]. - The company experienced a gain on extinguishment of debt amounting to $94 million for the three and six months ended June 30, 2025[295]. - Total operating revenues for the Annuities segment were $1.214 billion for the three months ended June 30, 2025, compared to $1.209 billion in 2024[298]. - Total operating expenses for the six months ended June 30, 2025, were $3,186 million, slightly up from $3,153 million in 2024, indicating a 1.0% increase[313]. Capital Management - The company sold approximately 18.8 million shares of its common stock for aggregate consideration of $825 million, representing 9.9% of its outstanding common stock[258]. - The company anticipates deploying capital from the stock sale towards strategic priorities, including growing spread-based earnings and optimizing its legacy life portfolio[258]. - LNC made capital contributions in cash to subsidiaries totaling $805 million for the six months ended June 30, 2025, including $800 million to LNL from the Bain Capital transaction[417]. - LNC's total long-term debt was $5.767 billion as of June 30, 2025, after accounting for repayments and changes in fair value[421]. - LNC issued $500 million of 2.330% Senior Notes due 2030, with a fair value of $418 million for the Trust I Eligible Assets received[430]. Investment Portfolio - Investments on the Consolidated Balance Sheets carried at fair value totaled $100,389 million, with 92% priced using observable inputs[262]. - The fair value of investments includes $592 million priced by third-party pricing services and $75,749 million using significant observable inputs[262]. - The total investments as of June 30, 2025, amounted to $131.144 billion, compared to $129.254 billion as of December 31, 2024, showing a 1.5% increase[364]. - Fixed maturity AFS securities were valued at $89.386 billion as of June 30, 2025, representing 68.1% of total investments[364]. - The total unrealized losses for fixed maturity AFS securities were $9,979 million, indicating significant market fluctuations[369]. Risk Management - The company emphasizes the importance of risk management policies and the potential impact of economic conditions on its financial performance[253]. - The MD&A highlights the need for careful consideration of forward-looking statements due to inherent risks and uncertainties[246]. - A hypothetical 10% decrease in equity market return could result in a $800 million decrease in net income, while a 10% increase could lead to a $725 million increase[281]. - The company utilizes derivative instruments to hedge exposure to selected risks associated with GLB and GDB riders, focusing on maximizing distributable earnings and protecting capital[276]. Segment Performance - The company operates through four business segments: Annuities, Life Insurance, Group Protection, and Retirement Plan Services[254]. - The Group Protection segment showed an improvement in the total loss ratio, contributing positively to overall performance[296]. - Income from operations for the Group Protection segment increased to $173 million for the three months ended June 30, 2025, compared to $130 million in 2024, marking a growth of 33.1%[331]. - The total operating revenues for the Group Protection segment reached $1,538 million for the three months ended June 30, 2025, up from $1,441 million in 2024, indicating a growth of 6.7%[331]. Policyholder and Claims Management - Future contract benefits represent liability reserves based on estimates for future claims and benefits[267]. - Liability for Future Policy Benefits (LFPB) is established based on actuarial assumptions including mortality rates and policyholder behavior, with a comprehensive review conducted quarterly[268]. - As of June 30, 2025, the total Net Amount at Risk (NAR) for Guaranteed Living Benefits (GLB) and Guaranteed Death Benefits (GDB) was $1,889 million, down from $2,278 million in 2024[275]. - The loss ratio for the total segment improved to 65.9% for the three months ended June 30, 2025, down from 70.1% in 2024, showing a positive trend in claims management[337]. Cash Flow and Liquidity - The company’s operating activities provided cash of $741 million for the six months ended June 30, 2025, compared to a cash usage of $(2.2) billion in 2024[408]. - The company’s liquidity is primarily sourced from insurance premiums and fees, investment income, and policyholder deposits, with ongoing cash needs expected to be met[404][408]. - Total cash dividends and return of capital from subsidiaries amounted to $170 million for the three months ended June 30, 2025, compared to $15 million for the same period in 2024[410]. Expenses and Cost Management - Total operating expenses for the Annuities segment were $876 million for the three months ended June 30, 2025, compared to $858 million in 2024[298]. - Commissions and other expenses totaled $405 million in Q2 2025, down from $441 million in Q2 2024, with total pre-broker-dealer expenses incurred at $290 million compared to $284 million in the prior year[311]. - General and administrative expenses for the three months ended June 30, 2025, were $57 million, down from $64 million in 2024, a decrease of 10.9%[360]. Market and Economic Conditions - The company may update actuarial assumptions in any quarter as new information becomes available, ensuring the accuracy of liability estimations[270]. - The company anticipates managing the effects of interest rate spreads through portfolio management, with potential impacts on profitability due to changes in interest rates[304].