LNC
Lincoln National Corporation
$40.01
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 64.1% below fair value
You pay
$40.01
Bear
$78.01
Fair
$111.45
Bull
$144.88
Bear
$78.01
+95.0%
ROTCE 8.1% → 0.62x TBV
Fair
$111.45
+178.6%
ROTCE 10.8% → 1.02x TBV
Bull
$144.88
+262.1%
ROTCE 12.4% → 1.27x TBV
Adjust Assumptions
10.8%
10.6%
Key Value Driver
ROTCE (10.8%) vs. cost of equity (10.6%)
Implied Market Multiple
0.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (28 analysts)
$46.33
Divergence from AlphaVal
141%
Summary
With ROTCE of 10.8% vs. 10.6% cost of equity, fair P/TBV is 1.02x on $56.97 tangible book, implying $111.45 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.
Wall Street's average price target is $46.33 (from 28 analysts). Our estimate is 141% 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