On Thursday, Piper Sandler reiterated its Overweight rating on Voya Financial (NYSE:NYSE:VOYA) with a steady price target of $86.00. The endorsement follows a recent meeting with Voya Financial's top management, which included CEO and Director Heather Lavallee, EVP of Finance Michael Katz, and Investor Relations representative Mei Ni Chu. The session with investors highlighted several reasons for maintaining the positive outlook on the company.
The firm pointed out multiple potential areas for improvement in Voya's various business segments that could stabilize and eventually increase earnings per share (EPS) estimates over time. The remainder of 2024 is seen as a period ripe with opportunities for Voya to enhance its underlying results.
Piper Sandler also noted that, like many other companies they have engaged with, Voya is expected to benefit from increased spread income primarily driven by asset growth. This anticipated growth is seen as a significant positive factor for the company moving forward.
Moreover, Voya's valuation was described as attractive, especially considering the increasing number of company-specific catalysts. The attractiveness of Voya's stock was further emphasized by its inclusion in Piper Sandler's Triple Select Stocks report, which indicates that the company not only has solid fundamentals but also shows promise from a macroeconomic and technical standpoint.
In other recent news, Voya Financial reported a promising first quarter for 2024, with a 23% year-over-year increase in adjusted operating earnings per share (EPS) to $1.77. The company is on track to meet its full-year EPS target range of $8.25 to $8.45. Voya's performance was bolstered by positive net inflows and strong sales momentum in retirement and group benefits segments.
The company also announced a new $500 million share repurchase authorization, demonstrating its commitment to returning $800 million of excess capital to shareholders within the year. Despite a robust performance, Voya noted a decline in revenue yields in the Investment Management sector due to a mix shift.
However, the company's expansion into lower deductible levels in its stop-loss business is expected to contribute to sales growth. These developments reflect Voya's strategic focus on workplace strategy and investment management.
InvestingPro Insights
Piper Sandler's reaffirmation of Voya Financial's Overweight rating is bolstered by recent data and insights from InvestingPro. Voya's strategic share repurchases, as indicated by management's aggressive buyback activities, signal confidence in the company's valuation and future prospects. Additionally, Voya's consistent dividend growth, with dividends raised for 5 consecutive years and maintained for 12 consecutive years, reflects a commitment to shareholder returns.
In terms of valuation, Voya Financial is trading at a P/E ratio of 10.31, which is attractively low relative to near-term earnings growth. The company's adjusted P/E ratio for the last twelve months as of Q1 2024 stands at an even lower 9.1, suggesting that the stock may be undervalued. Moreover, the PEG ratio for the same period is 0.18, which could indicate potential for growth compared to earnings.
Investors looking to delve deeper into Voya Financial's performance and prospects can find additional insights and metrics on InvestingPro. For those interested in a comprehensive analysis, there are 4 more InvestingPro Tips available, which could further inform investment decisions. To access these tips and enjoy an exclusive offer, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. With Voya's next earnings date approaching on July 30, 2024, these insights could be particularly timely for investors considering Voya Financial's stock.
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