Lincoln National's Reinsurance Deal Unlocks Further Upside

Lincoln National executed a transformative $5.8B reinsurance deal, improving capital efficiency and freeing up resources for higher-return products. Q2 results were strong: EPS of $2.24 beat by $0.28, revenue grew 12%, and operating income rose for the 8th consecutive quarter. LNC’s capital actions, including preferred stock redemption and a secure 3.9% dividend, position it for resumed share repurchases and enhanced free cash flow. With a raised $50 price target and ongoing 'buy' rating, I see low-teens total return potential over the next year.

Shares of Lincoln National ( LNC ) have been a solid performer over the past year, with shares rallying about 20%. On Thursday, the company announced a blockbuster reinsurance deal, which sent shares surging back towards a 52-week high.