Voya Financial: Sell Rating Amid EPS Discrepancies and Mixed Segment Performance

Joshua Shanker, an analyst from Bank of America Securities, maintained the Sell rating on Voya Financial (VOYA – Research Report). The associated price target was lowered to $64.00.

Joshua Shanker has given his Sell rating due to a combination of factors affecting Voya Financial’s performance. Despite Voya’s first-quarter earnings per share (EPS) of $2.00 exceeding the Street consensus of $1.40, it fell short of Shanker’s forecast of $2.31. This discrepancy was primarily due to miscalculations in Wealth Solutions, particularly concerning one-time net commissions and amortization related to the OneAmerica acquisition. Although there were positive developments in Health Solutions with stronger underwriting results in Group Stop Loss, these were not sufficient to offset the overall shortfall.
Furthermore, while Investment Management showed robust net flows and Wealth Solutions reported significant mandate wins, there were challenges in Health Solutions. The operating income in Health Solutions exceeded expectations due to favorable prior-year developments, but sales declined significantly due to portfolio remediation efforts. Additionally, underwriting margins in Group Life and Voluntary segments did not meet forecasts due to unfavorable claims experience. Despite raising the price objective to $64, Shanker rates the stock as Underperform, suggesting limited upside compared to other investment opportunities.

VOYA’s price has also changed moderately for the past six months – from $82.930 to $60.240, which is a -27.36% drop .