Lincoln National’s (LNC) stock price fell more than 33% in yesterday’s market after reporting a substantial operating loss. However, the Motley Fool issued in their words “a rare all in “buy” alert.”
In contrast, Seeking Alpha news editor Liz Kiesche issued a report with the following headline “Morgan Stanley steps to sidelines on Lincoln National, due to $2.2B charge in Q3” Nevertheless, the headline was somewhat misleading because they report issued a $54 price target on this stock selling for $34.83 at the time.
Because of the provocative nature of this price drop I was asked to cover this company. Therefore, I offer this video illustrating how dramatically and quickly things have changed for Lincoln National Corp. However, this is not a stock that I closely follow so I strongly suggest that the viewer conduct their own research and due diligence.
With that said, I did go through the earnings transcript as thoroughly as I could and drew the following conclusion. There are a lot of moving parts in this company coupled with the necessity for actuarial assumptions that may or may not come to pass. Unquestionably, I see risk in this company and its stock.
On the other hand, I see that risk greatly mitigated by the current valuation. In other words, the risks may already be priced in. However, whether that is true or not is predicated on whether this horrible earnings report was truly the result of nonrecurring charges. Consequently, I would suggest “caveat emptor” buyer beware.
FAST Graphs Analyze Out Loud Video
— Chuck Carnevale
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Source: FAST Graphs