Voya Financial (VOYA) Wins DC Retirement Mandate, Is The Stock Fully Valued?
Voya Financial (VOYA) is back in focus after the District of Columbia selected the company to provide recordkeeping and administration for its 401(a) and 457(b) public retirement plans.
For investors tracking the share price, Voya Financial has moved higher in recent months, with a 90 day share price return of 26.8% and a year to date gain of 34.31%. The 1 year total shareholder return of 37.17% points to momentum that has been building rather than fading as the company adds mandates like the District of Columbia retirement plans and continues to talk about targeted acquisitions.
Scan other retirement and benefits stocks showing similar momentum and balance sheet strength with the hand picked list of solid balance sheet and fundamentals (51 results), which may appeal if Voya Financial's latest win is on your radar.
Voya Financial has clear momentum and a growing public sector footprint. After this sharp move in the share price, the real tension for investors is simple: Does the current valuation still leave enough upside potential?
Most Popular Narrative: 4.1% Undervalued
The most followed narrative currently places Voya Financial's fair value at $105.83, slightly above the latest close of $101.54. This suggests a modest discount and puts more focus on the assumptions behind that gap.
The analysts have a consensus price target of $105.83 for Voya Financial based on their expectations of its future earnings growth, profit margins and other risk factors.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $125.0, and the most bearish reporting a price target of just $85.0.
Want to see what sits under that valuation spread? The narrative leans heavily on rising earnings, firmer margins and a richer future earnings multiple. The interesting part is how each of those pieces is expected to move together.
Result: Fair Value of $105.83 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, you still need to keep an eye on fee compression in retirement and asset management, as well as on acquisition integration risks that could unsettle the Voya Financial story.
Find out about the key risks to this Voya Financial narrative.
Another View On Voya Financial's Valuation
The analyst narrative points to Voya Financial trading at a modest discount to a fair value of $105.83. A different lens comes from its P/E of 16.1x versus the US Diversified Financial industry at 17.8x and a fair ratio of 16.6x. That gap is small, so how much mispricing is really left?
For a closer look at how this price compares with peers and how the P/E could change over time, take a look at the See what the numbers say about this price — find out in our valuation breakdown.
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Next Steps
Mixed views on Voya Financial so far. If you want to move quickly and base your stance on the numbers, review the 5 key rewards and 1 important warning sign.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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