Lincoln National Corp. (LNC) is slated to report Q1 earnings after the market close on Tuesday, May 5 with a conference call scheduled for Wednesday, May 6 at 11:00 am ET.
Analysts are looking for EPS of 71c on revenue of $2.54B. The consensus range is 42c-96c for EPS, and $2.51B-$2.58B for revenue, according to First Call.
Two research firms have issued somewhat optimistic notes on Lincoln National in recent weeks. Morgan Stanley on April 29 upgraded the company to Equal Weight from Underweight, citing valuation. On April 21 Bank of America/Merrill raised Lincoln National to Buy from Underperform. The firm, which increased its target to $17 from $10, believes that the insurer will qualify for and accept TARP funding. Indeed, the Wall Street Journal, citing unnamed sources, reported on April 8 that the Treasury had decided to provide TARP funding to a number of life insurance companies.
Investors will want to determine later today if Lincoln National believes it will be one of the recipients of TARP. Meanwhile, several firms had downbeat outlooks on Lincoln National in the weeks before possible TARP funding came to light. Citigroup cut its rating on the insurer to Sell from Buy on April 2. The firm expects Lincoln to report EPS of ($5.17), and contends that the insurer's capital and liquidity position is vulnerable.
Credit Suisse downgraded Lincoln National to Neutral from Outperform on March 30. The firm expects tension between the holding company's need for capital and further pressure on subsidiary capital levels.
Finally, Moody's on March 20 dropped Lincoln National's senior debt rating to Baa1 from A3. The ratings agency downgraded Lincoln's insurance financial strength rating to A1 from Aa3. Moody's said that the downgrade was primarily driven by Lincoln National's reduced financial flexibility, weakened profitability, expected further investment losses, and lower statutory capitalization. Furthermore, the ratings agency predicts that Lincoln National's ability to pay dividends will be impaired. In addition, Moody's expects Lincoln to be hurt by its "significant exposure" to equity markets, caused by its large block of variable annuities.