Voya Financial ‘s management team is undertaking a turnaround that seems to be steering the ship in the right direction, according to Morgan Stanley. Morgan Stanley analyst Bob Jian Huang upgraded shares of the New York-based asset manager to overweight from equal weight, and lifted his 12-month price target 14% to $87 from $76. The move reversed an August downgrade of Voya to equal weight from overweight on concerns about the longer-term profitability of Voya’s health solutions business. Shares of Voya have added less than 4% over the past 12 months, but Huang’s updated price forecast implies a potential upside of more than 23%. The stock also yields 2.55%, according to FactSet data. VOYA 1Y mountain VOYA 1Y chart The analyst attributed Voya’s underperformance, in part, to the asset manager’s 2024 full-year earnings miss. “The stock is currently trading below historical average, but is much less capital intensive,” Huang wrote. “We believe the current valuation overly penalizes execution risks and does not fully reflect Voya’s potential.” The stock trades at a discount, “[d]espite the fact that Voya has improved its EPS growth, ROE and capital intensity profile vs. pre-COVID,” Morgan Stanley said. Huang noted that since the 2024 miss, Voya’s management has actively taken strategic steps to improve performance via new pricing and improved risk selection, setting up an attractive growth profile for the company in 2026 and beyond. Voya now expects core business growth within its wealth solutions and investment management segment, and recent acquisitions should ultimately help improve excess capital generation next year versus 2024 numbers. “The turnaround should improve the overall prospect of the company, and improve the overall earnings potential,” Huang argued. “We have confidence in management’s ability to navigate integrations, investments, and segment improvements, which should uplift capital generation.”
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