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On Friday, Morgan Stanley (NYSE:MS) upgraded Voya Financial (NYSE:VOYA) stock rating from Equalweight to Overweight and increased the price target to $87.00 from the previous $76.00. The adjustment follows the company’s full-year earnings per share (EPS) for 2024, which came in at $7.25, below the expected guidance range of $8.25-8.45. According to InvestingPro data, the stock currently trades at a P/E ratio of 11.1x, suggesting an attractive valuation relative to its growth potential.
During the fourth-quarter earnings call, Voya Financial’s management outlined a turnaround strategy that Morgan Stanley believes will support the company’s long-term growth. The firm anticipates that the headwinds faced by Voya’s Health Solutions segment will lessen, leading to more stable results. Additionally, both EPS and return on equity (ROE) are expected to improve in the upcoming years. InvestingPro data reveals the company has maintained dividend payments for 13 consecutive years and boasts a healthy current ratio of 8.6x, indicating strong financial stability.
Morgan Stanley’s analysis suggests that Voya Financial’s stock is trading below its historical average, despite the company being less capital intensive than in the past. The firm asserts that the current market valuation of Voya Financial excessively discounts the execution risks and does not adequately account for the company’s growth potential.
The upgrade to Overweight reflects Morgan Stanley’s confidence in Voya Financial’s ability to navigate through current challenges and capitalize on its growth opportunities. The new price target of $87.00 indicates a positive outlook for the stock’s performance, premised on the belief that the market will eventually recognize Voya’s intrinsic value.
In other recent news, Voya Financial reported strong fourth-quarter earnings, surpassing Wall Street estimates with earnings per share of $1.40, compared to the expected $1.27. The company’s revenue also exceeded projections, reaching $2.01 billion against the forecasted $1.88 billion. Despite these results, Barclays (LON:BARC) downgraded Voya Financial’s stock from Overweight to Equal Weight, setting a new price target of $75.00 due to concerns over future earnings and consensus estimates for 2026. Similarly, Wells Fargo (NYSE:WFC) downgraded the stock to Equal Weight, adjusting the price target to $76.00, citing issues with stop loss performance and potential challenges ahead. Additionally, Voya Financial disclosed preliminary fourth-quarter results that fell short of long-term expectations, particularly in alternative investment income and prepayment fees. The company also announced the appointment of Jay Kaduson as the new CEO of its Workplace Solutions division, effective January 16, 2025. Kaduson, with extensive experience in the financial services industry, is expected to guide the Health Solutions and Wealth Solutions businesses. These developments reflect Voya Financial’s ongoing strategic adjustments and market challenges.
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