Credit Suisse Starts Lincoln National (LNC) at Neutral
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Credit Suisse initiates coverage on Lincoln National (NYSE: LNC) with a Neutral rating and a price target of $57.00.
Analyst John Nadel commented, "Lincoln is often viewed as one of the most interest ratesensitive names among our coverage, but we see risk to the income statement and balance sheet from sustained low rates as manageable over the intermediate term. While net investment income should continue to come under pressure as higher portfolio yields continue to roll off and there is a possibility of unfavorable unlocking in both Life Insurance and Annuities, we believe we are incorporating the NII drag in our earnings model, and we see book value risk as relatively immaterial should rates remain near current levels (or continue even lower) given recent disclosures at Lincoln’s Investor Day. We expect Operating Earnings to grow at a relatively modest pace of 5%/4% in 2017/18, respectively, and we think the company could retire between 3-5% of outstanding shares per year (running at a ~60% combined dividend and buyback payout ratio)."
Shares of Lincoln National closed at $49.20 yesterday.
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