This story originally appeared on Zacks
National Lincoln Society CNL is expected to report its fourth quarter 2021 results on February 2, after the market closes.
– Zacks
Fourth quarter estimates
Zacks’ consensus estimate for earnings per share is pegged at $1.98, indicating an 11.2% increase over the reported figure for the year-ago quarter. The revenue consensus mark stands at $4.687 billion, suggesting a 0.7% increase from the figure reported a year ago.
Factors to note
Lincoln National is expected to grow under favorable conditions. LNC is well positioned for growth through its product strategy, distribution strength and diversified portfolio. The COVID-19 pandemic has heightened the importance of obtaining life insurance coverage and the improving employment scenario bodes well for LNC’s group insurance business.
The combination of underlying growth and improved mortality results positions Lincoln National well for both its life insurance and group businesses. LNC also stands to benefit from product innovation and digital capabilities.
In Lincoln National’s Annuity business, sales of variable annuities without guaranteed living benefits likely increased in the report quarter. The consensus mark for annuity income points to a 9.5% rise from the figure published a year ago.
The insurer’s Retirement business is also poised to benefit from the tailwinds of an improving economy, rising account values on the back of robust equity market performance, strong alternative investment portfolio and consistent spending efficiency.
The consensus mark for pension and benefits services business revenue suggests an increase of 1.5% and 2.2% each compared to the actuals in the respective quarter of the prior year.
LNC has made constant efforts to protect its returns on investment in the face of a low interest rate environment. Its portfolio is doing quite well with high credit quality, which has recently improved. Investment income has been rising for many years, a trend that most likely continued into the fourth quarter.
In addition, his expenses have likely decreased due to lower benefit costs.
Lincoln National continues to report declining expense ratios across most of its businesses. Expense reduction measures will consistently contribute to earnings growth.
Earnings Surprise History
LNC has an impressive history of earnings surprises. Its net income has missed estimates in one of the last four quarters and has beaten the mark three times, with the average surprise being 2.11%. This is represented in the table below:
What our quantitative model predicts
Zacks’ proven model does not conclusively predict an earnings beat for Lincoln National this time around. The combination of a positive ESP Earnings and a Zacks rank of #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of beating earnings. But it is not the case here.
ESP Earnings: Lincoln National has an ESP on earnings of 0.00%. You can discover the best stocks to buy or sell before they’re flagged with our Income ESP filter.
Zack’s Ranking: Lincoln National wears a No. 3 Zacks rank, currently.
Actions to Consider
Some actions to consider with the perfect mix of items to exceed estimates in future releases are:
Investment in American shares Life Holding ALE currently has a Zacks Rank of 3 and a Gain ESP of +2.86%.
The Allstate Company ALL is currently ranked No. 3 in Zacks and has a +2.86% earnings ESP.
CNA Financial Corporation CNA has a +2.65% earnings ESP and is currently a #3 rated player. You can see the full list of today’s Zacks #1 Rank stocks here.
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Lincoln National Corporation (LNC): Free Stock Analysis Report
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