Voya Financial is seemingly on a promising path toward recovery, as pointed out by Morgan Stanley. Analyst Bob Jian Huang from Morgan Stanley has boosted his rating for this New York-based asset management firm, shifting it from ‘equal weight’ to ‘overweight.’ Interestingly, he has also increased the company’s 12-month target price from $76 to $87, marking a 14% rise. This change in stance comes after an August downgrade, which had been driven by worries regarding the long-term profitability of Voya’s health solutions division. In the past year, Voya’s shares have seen a modest increase of under 4%, yet Huang believes there’s room for them to climb over 23%, given his latest price projection. According to FactSet data, the stock even offers a 2.55% yield.
Huang points out that Voya’s recent underperformance is partly due to its 2024 earnings shortfall. “Currently, the stock trades below its historical average, though it demands less capital,” Huang commented. “We feel today’s valuation overly accounts for execution risks while not fully acknowledging Voya’s potential.” Despite Voya enhancing certain aspects like EPS growth, return on equity, and capital use since pre-COVID times, its stock remains undervalued, Morgan Stanley noted.
After the 2024 earnings miss, Voya’s leadership has been proactive in making strategic choices like introducing new pricing models and better risk assessment—steps that are anticipated to create an appealing growth trajectory for 2026 and beyond. The company is now looking forward to core business growth in its wealth solutions and investment management branches. Additionally, recent acquisitions should aid in improving capital surplus next year in comparison to 2024 figures.
Huang is optimistic about Voya’s fortunes, believing this transformation can bolster the company’s overall prospects and profit potential. “We trust in the management’s expertise in handling integrations, investments, and segment enhancements, which should boost capital generation,” he asserted.
