LNC
Lincoln National Corporation
$41.88
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 56.2% below fair value
You pay
$41.88
Bear
$66.96
Fair
$95.67
Bull
$124.37
Bear
$66.96
+59.9%
ROTCE 8.1% → 0.61x TBV
Fair
$95.67
+128.4%
ROTCE 10.8% → 1.01x TBV
Bull
$124.37
+197.0%
ROTCE 12.4% → 1.26x TBV
Key Value Driver
ROTCE (10.8%) vs. cost of equity (10.7%)
Implied Market Multiple
0.73x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $48.33 from 28 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $95.67 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Dividend-based valuation: $17.42 (84% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $48.33 (from 28 analysts). Our estimate is 131% above the consensus -- consider that gap carefully.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly