Lincoln Financial Group has gotten torched over the last six months - since December 2025, its stock price has dropped 21.4% to $35.39 per share. This was partly driven by its softer quarterly results and may have investors wondering how to approach the situation.
Is there a buying opportunity in Lincoln Financial Group, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Is Lincoln Financial Group Not Exciting?
Even with the cheaper entry price, we’re cautious about Lincoln Financial Group. Here are three reasons we avoid LNC, plus one stock we’d rather own.
1. Net Premiums Earned Hit a Plateau
When insurers sell policies, they protect themselves from extremely large losses or an outsized accumulation of losses with reinsurance (insurance for insurance companies). Net premiums earned are therefore net of what’s ceded to reinsurers as a risk mitigation and transfer strategy.
Lincoln Financial Group’s net premiums earned was flat over the last five years, much worse than the broader insurance industry and in line with its total revenue.
2. Projected Revenue Growth Is Slim
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect Lincoln Financial Group’s revenue to rise by 2.6%, a deceleration versus its 9.9% annualized growth for the past two years. This projection is underwhelming and suggests its products and services will see some demand headwinds.
3. Substandard BVPS Growth Indicates Limited Asset Expansion
For insurers, book value per share (BVPS) is a vital measure of financial health, representing the total assets available to shareholders after accounting for all liabilities, including policyholder reserves and claims obligations.
Disappointingly for investors, Lincoln Financial Group’s BVPS grew at a mediocre 11.8% annual clip over the last two years.
Final Judgment
Lincoln Financial Group isn’t a terrible business, but it doesn’t pass our quality test. Following the recent decline, the stock trades at 0.7× forward P/B (or $35.39 per share). While this valuation is optically cheap, the potential downside is big given its shaky fundamentals. We’re pretty confident there are more exciting stocks to buy at the moment. We’d suggest looking at one of our top digital advertising picks.
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