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VOYA Lags Industry, Trades at a Discount: Time to Hold or Buy?
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Key Takeaways
VOYA's defined-contribution net inflows reached $8.1 billion, while fee-based revenues rose 10% in Q2.
VOYA's Investment Management operating earnings rose 12% to $57 million, with $1.2 billion of net inflows.
VOYA's Wealth Management assets reached $33 billion, up 60%, while revenues increased 12% year over year.
Shares of Voya Financial, Inc. (VOYA - Free Report) have lost 6.1% in the past month against the industry’s growth of 0.6%.
The decline was due to a second-quarter 2026 earnings miss, weak alternative investment returns and a sharp drop in Employee Benefits earnings. However, retirement business growth, higher fee-based revenue, cost savings and share buybacks could support future earnings growth.
Image Source: Zacks Investment Research
Shares of Voya Financial have outperformed its peers, including Reinsurance Group of America, Incorporated (RGA - Free Report) , which has gained 2.8%, while Primerica, Inc. (PRI - Free Report) and Brighthouse Financial, Inc. (BHF - Free Report) have declined 4.1% and 1.9%, respectively, in the past month.
VOYA Shares Are Affordable
Voya Financial shares are trading at a price-to-book value of 1.35X, lower than the industry average of 2.27X.
Image Source: Zacks Investment Research
Shares of RGA, PRI and BHF are trading at 1.20X, 3.41X and 0.45X, respectively, to the industry average.
VOYA’s Average Target Price Suggests Upside
Based on short-term price targets offered by 12 analysts, the Zacks average price target is $108.08 per share. The average suggests a potential 13.7% upside from the last closing price.
VOYA’s Growth Projection
The Zacks Consensus Estimate for Voya Financial’s 2026 earnings per share (EPS) indicates a 4.1% year-over-year increase. The consensus estimate for revenues is pegged at $1.31 billion, implying a 2.3% year-over-year decline. The consensus estimate for 2027 EPS and revenues indicates an increase of 23.7% and 12%, respectively, from the corresponding 2026 estimates.
Earnings have grown 8.8% in the past five years, better than the industry average of 4.9%. The expected long-term earnings growth rate is 11.2%.
Factors Acting in Favor of VOYA
Voya Financial’s Retirement business remains a key growth driver, supported by strong participant growth and rising fee-based revenues. Defined-contribution net inflows totaled $8.1 billion in the second quarter, while fee-based revenue grew 10% year over year and accounted for more than 60% of Retirement revenues. With more than 10 million participant accounts and additional large-plan implementations expected in the second half of 2026, the shift toward fee-based revenues should support a more stable recurring revenue stream and margin growth.
Management described the OneAmerica retirement acquisition as highly successful, generating returns above 30%. The acquisition has meaningfully strengthened the scale and earnings power of Voya’s Retirement business, which now serves nearly 10 million Retirement accounts.
Investment Management operating earnings rose 12% to $57 million, while second-quarter net inflows reached $1.2 billion. AUM stood at about $377 billion, supported by strong investment performance and demand for fixed income and private credit. VOYA continues to take strategic steps to drive growth in its Investment Management segment. Voya Financial’s long-term strategic partnership with Allianz Global Investors has added scale and diversification to Voya Investment Management.
Voya’s Wealth Management business is emerging as another growth opportunity. Revenues increased 12% year over year in the second quarter, while assets reached approximately $33 billion, up 60% from the prior-year period. More than 650 advisers support the company’s efforts to expand advice and wealth-management services among its retirement customers.
The insurer’s Employee Benefits segment is likely to benefit from improving Stop Loss underwriting. In the second quarter of 2026, the loss ratio declined 50 pts to 74%. Higher Stop Loss pricing, tighter underwriting and better risk selection are expected to support margins, with management targeting margins by 2027.
Voya Financial incurred approximately $40 million of pretax severance costs in the second quarter of 2026 as part of its expense-reduction initiatives. However, management expects these actions to fully offset the upfront costs by year-end. The lower expense base should improve operating leverage and establish a more favorable cost structure heading into 2027.
The company’s capital levels remain strong. Voya Financial generated approximately $150 million of excess capital in the second quarter and $350 million in the first half of 2026. The company repurchased $150 million of shares in the second quarter and plans to repurchase at least another $100 million in the third quarter. Continued capital generation and buybacks should support EPS growth while enhancing shareholder returns.
Risks for VOYA
Voya Financial remains exposed to market conditions, employment trends and investment performance. Weak alternative investment results and lower Retirement spread income pressured second-quarter earnings, although management expects alternative investment performance to improve in the third quarter of 2026.
VOYA faces intense competition from broker-dealers, financial advisors, diversified financial institutions and start-up financial services providers, which could increase pricing pressure on certain products and services.
Conclusion
Voya Financial benefits from solid retirement business growth, higher fee-based revenue and improving profitability across key businesses. Strong net inflows, cost-saving initiatives and capital returns are expected to support its financial performance, while competition and market volatility remain key risks. Therefore, it is wise to retain this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
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VOYA Lags Industry, Trades at a Discount: Time to Hold or Buy?
Key Takeaways
Shares of Voya Financial, Inc. (VOYA - Free Report) have lost 6.1% in the past month against the industry’s growth of 0.6%.
The decline was due to a second-quarter 2026 earnings miss, weak alternative investment returns and a sharp drop in Employee Benefits earnings. However, retirement business growth, higher fee-based revenue, cost savings and share buybacks could support future earnings growth.
Image Source: Zacks Investment Research
Shares of Voya Financial have outperformed its peers, including Reinsurance Group of America, Incorporated (RGA - Free Report) , which has gained 2.8%, while Primerica, Inc. (PRI - Free Report) and Brighthouse Financial, Inc. (BHF - Free Report) have declined 4.1% and 1.9%, respectively, in the past month.
VOYA Shares Are Affordable
Voya Financial shares are trading at a price-to-book value of 1.35X, lower than the industry average of 2.27X.
Image Source: Zacks Investment Research
Shares of RGA, PRI and BHF are trading at 1.20X, 3.41X and 0.45X, respectively, to the industry average.
VOYA’s Average Target Price Suggests Upside
Based on short-term price targets offered by 12 analysts, the Zacks average price target is $108.08 per share. The average suggests a potential 13.7% upside from the last closing price.
VOYA’s Growth Projection
The Zacks Consensus Estimate for Voya Financial’s 2026 earnings per share (EPS) indicates a 4.1% year-over-year increase. The consensus estimate for revenues is pegged at $1.31 billion, implying a 2.3% year-over-year decline. The consensus estimate for 2027 EPS and revenues indicates an increase of 23.7% and 12%, respectively, from the corresponding 2026 estimates.
Earnings have grown 8.8% in the past five years, better than the industry average of 4.9%. The expected long-term earnings growth rate is 11.2%.
Factors Acting in Favor of VOYA
Voya Financial’s Retirement business remains a key growth driver, supported by strong participant growth and rising fee-based revenues. Defined-contribution net inflows totaled $8.1 billion in the second quarter, while fee-based revenue grew 10% year over year and accounted for more than 60% of Retirement revenues. With more than 10 million participant accounts and additional large-plan implementations expected in the second half of 2026, the shift toward fee-based revenues should support a more stable recurring revenue stream and margin growth.
Management described the OneAmerica retirement acquisition as highly successful, generating returns above 30%. The acquisition has meaningfully strengthened the scale and earnings power of Voya’s Retirement business, which now serves nearly 10 million Retirement accounts.
Investment Management operating earnings rose 12% to $57 million, while second-quarter net inflows reached $1.2 billion. AUM stood at about $377 billion, supported by strong investment performance and demand for fixed income and private credit. VOYA continues to take strategic steps to drive growth in its Investment Management segment. Voya Financial’s long-term strategic partnership with Allianz Global Investors has added scale and diversification to Voya Investment Management.
Voya’s Wealth Management business is emerging as another growth opportunity. Revenues increased 12% year over year in the second quarter, while assets reached approximately $33 billion, up 60% from the prior-year period. More than 650 advisers support the company’s efforts to expand advice and wealth-management services among its retirement customers.
The insurer’s Employee Benefits segment is likely to benefit from improving Stop Loss underwriting. In the second quarter of 2026, the loss ratio declined 50 pts to 74%. Higher Stop Loss pricing, tighter underwriting and better risk selection are expected to support margins, with management targeting margins by 2027.
Voya Financial incurred approximately $40 million of pretax severance costs in the second quarter of 2026 as part of its expense-reduction initiatives. However, management expects these actions to fully offset the upfront costs by year-end. The lower expense base should improve operating leverage and establish a more favorable cost structure heading into 2027.
The company’s capital levels remain strong. Voya Financial generated approximately $150 million of excess capital in the second quarter and $350 million in the first half of 2026. The company repurchased $150 million of shares in the second quarter and plans to repurchase at least another $100 million in the third quarter. Continued capital generation and buybacks should support EPS growth while enhancing shareholder returns.
Risks for VOYA
Voya Financial remains exposed to market conditions, employment trends and investment performance. Weak alternative investment results and lower Retirement spread income pressured second-quarter earnings, although management expects alternative investment performance to improve in the third quarter of 2026.
VOYA faces intense competition from broker-dealers, financial advisors, diversified financial institutions and start-up financial services providers, which could increase pricing pressure on certain products and services.
Conclusion
Voya Financial benefits from solid retirement business growth, higher fee-based revenue and improving profitability across key businesses. Strong net inflows, cost-saving initiatives and capital returns are expected to support its financial performance, while competition and market volatility remain key risks. Therefore, it is wise to retain this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.