Yahoo Finance What Does Lincoln National Corporation's (NYSE:LNC) Share Price Indicate?
Lincoln National Corporation (NYSE:LNC) saw significant share price movement during recent months on the NYSE, rising to highs of US$62.18 and falling to the lows of US$53.92. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Lincoln National's current trading price of US$59.17 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Lincoln National’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Lincoln National
What's the opportunity in Lincoln National?
The stock seems fairly valued at the moment according to my relative valuation model. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 14.16x is currently trading slightly below its industry peers’ ratio of 16.44x, which means if you buy Lincoln National today, you’d be paying a reasonable price for it. And if you believe that Lincoln National should be trading at this level in the long run, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Lincoln National’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will Lincoln National generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Lincoln National’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? LNC’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at LNC? Will you have enough conviction to buy should the price fluctuate below the true value?
Are you a potential investor? If you’ve been keeping an eye on LNC, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic forecast is encouraging for LNC, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Lincoln National. You can find everything you need to know about Lincoln National in the latest infographic research report. If you are no longer interested in Lincoln National, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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