Why Lincoln National’s new $500 million bond issue matters for stock investors

Lincoln National (LNC) has just completed a $500 million offering of fixed to fixed reset subordinated notes due 2056, giving the insurer a fresh pool of long dated capital that could influence how you think about the stock.

Against this backdrop, Lincoln National’s 1 day share price return of 2.49% and 30 day share price return of 4.62% sit alongside a year to date share price decline of 19.51%. At the same time, the 3 year total shareholder return of 66.13% and 1 year total shareholder return of 8.68% point to longer term momentum that contrasts with recent pressure as investors reassess risk and income following the new subordinated notes and upcoming earnings update.

If you are weighing Lincoln National’s capital move against other opportunities, this is a good moment to see what else is on offer through our screener of 20 top founder-led companies

With Lincoln National trading below some analyst targets and third party fair value estimates, yet showing mixed recent returns, the key question for you is simple: is this genuine undervaluation, or is the market already pricing in future growth?

Most Popular Narrative: 20.3% Undervalued

Lincoln National’s most followed narrative points to a fair value of $45.46 versus the last close at $36.23, putting the new $500 million bond raise in the context of a company that some analysts see as undervalued on their long term cash flow and earnings assumptions.

Restructuring legacy products (such as optimizing the legacy life portfolio and reducing reliance on reinsurance) and more efficient capital allocation, enabled by a strengthened capital buffer and new partnerships (e.g., Bain Capital), are expected to unlock additional free cash flow and support higher risk adjusted returns, enhancing profitability in future years.

This narrative leans on a reworked product mix, improving margins and a future earnings profile that does not assume tech like growth yet still supports a higher valuation multiple than today. The bond issue slots directly into that story by reinforcing the capital base that underpins those long dated cash flows.

Result: Fair Value of $45.46 (UNDERVALUED)

However, Lincoln National still faces meaningful risks, including legacy variable annuity guarantees and potential revenue pressure from ongoing outflows in Retirement Plan Services.

Next Steps

With that mix of optimism and concern around Lincoln National, now is the time to review the numbers yourself and decide where you stand. A good place to start is the 3 key rewards and 2 important warning signs.

Looking for more investment ideas beyond Lincoln National?

If Lincoln National has sharpened your thinking, do not stop there. Broadening your watchlist now can help you spot opportunities you might otherwise miss.

• Target long term compounding potential by zeroing in on companies that screen as 41 high quality undervalued stocks.
• Prioritize income and stability by reviewing stocks in the 8 dividend fortresses that could support a steady stream of payouts.
• Reduce downside surprises by focusing on companies highlighted in our 73 resilient stocks with low risk scores.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.