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Here’s Why Voya Financial Stock (NYSE:VOYA) Ticked Up Today
Stock Analysis & Ideas

Here’s Why Voya Financial Stock (NYSE:VOYA) Ticked Up Today

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Voya Financial ticked up after a new rating at Piper Sandler. The reasons behind that rating, and a few others, combine to make Voya a fairly attractive offering in an otherwise risky market.

Financial services firm Voya Financial (NYSE: VOYA) has plenty of options available to its customer base. Some might think that this leaves it excessively vulnerable, especially given current economic conditions. However, Piper Sandler suggests quite the opposite. VOYA was up 1.2% in pre-market trading and built on those gains going into today’s trading session. Voya Financial landed an upgrade from Piper Sandler, as analyst John Barnidge upgraded the company from Neutral to Buy.

Barnidge also upgraded the company’s price target from its original $65 to $70.

The biggest reason was Voya’s current valuation, which proved attractive. The fact that a large portion of its portfolio would actually be helped by inflation gave it an edge as well.

Barnidge pointed out that Voya was heavily involved in education, government, and healthcare operations. These areas are likely to hold out best through a recession. Moreover, a tight labor market ensures contributions to employee health benefits and retirement plans are likely to continue. That gives Voya more cash to work with.

It’s hard to refute John Barnidge on this one. Voya Financial actually looks like it’s in a good place to survive an upcoming recession. Anything that’s recession-resistant is worth a second look, especially as investors pursue value investments. That leaves me bullish on Voya Financial.

Is Voya Financial a Good Stock to Buy?

Turning to Wall Street, Voya Financial has a Moderate Buy consensus rating. That’s based on eight Buys and three Holds assigned in the past three months. The average Voya Financial price target of $76.64 implies 23.95% upside potential.

Analyst price targets range from a low of $65 per share to a high of $85 per share.

Voya’s Investor Sentiment is the Soul of Moderation

John Barnidge’s projections suggest that now might be a good time to back the truck up and load up on Voya Financial. However, investor sentiment is much more restrained. Currently, Voya Financial has a 5 out of 10 Smart Score on TipRanks.

That’s the lower half of the midpoint and the second-lowest score of Neutral. It suggests a slightly better than even chance that Voya will ultimately lag the broader market.

Insider trading at Voya Financial, meanwhile, isn’t saying much one way or the other. Trading, in general, at this company has been quiet as a mouse for months. The last informative trade took place four months ago, as director Joseph Tripodi purchased $148,444 worth of stock. Interestingly, at about the same time, director David Zwiener bought the exact same amount.

The aggregate, meanwhile, offers about all the commentary we’ll get for insider trading at Voya Financial. There was one purchase made in the last three months. That’s it for insider transactions in that time frame.

Going back to the last 12 months gives us a little more to work with, but not much. Insiders staged 12 Sell transactions and 14 Buy transactions. This demonstrates a slightly better than even interest in buying among insiders.

In fact, all of the company’s most recent insider trading activity has been buying. That suggests a bit of a turnaround in the making. Someone inside the company expects gains.

A Financial Services Firm That Can Protect Itself

With Voya Financial doing so much of its business in sectors clearly protected against recession, that bodes well for Voya’s ability to carry on in a recessionary environment. It’s doing business with firms and agencies that stand the best chance of coming out intact on the other side of a recession, and that’s a good position to be in.

It’s not just Voya’s clientele that gives it an edge, though. The company is actively pushing in ESG operations (Environmental, Social, Governance). It’s just joined the United Nations Global Compact initiative, which will give it substantial ESG credibility.

The UN Global Compact looks to develop operations within “ten universally accepted principles in the areas of human rights, labor, environment, and anti-corruption.”

Meanwhile, Voya employees were on hand for the National Down Syndrome Society New York City Buddy Walk that took place about two weeks ago. The event gives individuals with Down syndrome and their caregivers a chance to share stories and raise awareness.

Voya is also looking to make its current slate of services more accessible. The launch of myVoyage, a personalized financial guidance plan that offers insight into available workplace benefits, should also help current customers get the most out of Voya’s offerings.

When you add all these factors up, a picture unfolds about just how well Voya Financial is positioned to survive a recession. It may even be able to advance its current position coming out the other side.

It’s already made moves into sectors that are recession resistant. Its recently-completed acquisition of Allianz Global Investors didn’t hurt on that front either. Voya is bulking up its ESG stats in the face of a market that increasingly appreciates ESG clarity.

Morningstar Direct studies noted that “sustainably managed assets” were up 51% in December 2021 when measured against December 2020.

Just to top it off, it’s also making its services more accessible and user-friendly, a point which shouldn’t be lost on customers using Voya services. That will help keep users in the fold and prevent large amounts of loss to competing firms.

Conclusion: Protecting All the Angles

Recessions aren’t generally great for investors. There are workarounds and ways to play a bear market. Still, a lot of companies—particularly those that were doing great in boom times—lose a lot of ground.

Major companies that looked like they’d be safe forever, or soaring upward, suddenly sour. Dividend aristocrats lose their crowns, and income investors are left scrambling to find new producers.

However, Voya Financial looks like it should be in a good place to take on the worst of a recession. It’s got multiple avenues for growth and a lot of potential backing it up. It’s working to keep its current customers in play and bring in new ones. The ones it has already are least likely to lose much ground with an economic turnaround.

That all adds up to a company in good shape to take on a dim future economic outlook. Throw in the fact that it’s trading under its lowest price targets, and that makes for all the reason to be bullish you could want.

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