Morgan Stanley upgrades Voya Financial stock on turnaround

Investing.com
28 Feb

Investing.com -- Morgan Stanley upgraded Voya Financial Inc (NYSE:VOYA) to “Overweight” from “Equalweight,” raising its price target to $87 from $76 driven by confidence in the company’s strategic initiatives and capital generation improvements.

Voya’s turnaround strategy, outlined during its fourth-quarter earnings, positions the company for long-term growth after a challenging 2024. While full-year EPS of $7.25 fell short of guidance, Morgan Stanley expects headwinds in Health Solutions to abate, with earnings and return on equity set to improve in the coming years.

Voya’s integration of recent acquisitions, including OneAmerica in Wealth Solutions and Benefitfocus (NASDAQ:BNFT) in Health Solutions, should drive earnings benefits, the firm said. Investments in leave management, disability administration, and third-party insurance asset management are expected to yield positive impacts beyond 2025.

Morgan Stanley values Voya based on its 2026 EPS estimate, applying segment-specific multiples to arrive at a 9.2-times valuation. It sees the stock as undervalued relative to its capital-light profile and multiple growth paths.

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