VOYA Outperforms Industry, Trades Near 52-Week High: Time to Hold?

Shares of Voya Financial have outperformed its peers, including Reinsurance Group of America, Incorporated RGA, Primerica, Inc. PRI and Brighthouse Financial, Inc BHF, which have gained 21.4%, 15.7% and 25.7%, respectively, in the past year.

1-Year Performance: VOYA, RGA, PRI, BHF & Industry

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VOYA’s Attractive Valuation

Voya Financial shares are trading at a price-to-book value of 1.38X, lower than the industry average of 2.33X.

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VOYA’s Growth Projection

The Zacks Consensus Estimate for Voya Financial’s 2026 earnings per share (EPS) indicates a year-over-year increase of 6.2%. The consensus estimate for revenues is pegged at $1.33 billion, implying a year-over-year decline of 2.5%. The consensus estimate for 2027 EPS and revenues indicates an increase of 19.3% and 9.1%, respectively, from the corresponding 2026 estimates.  

Earnings have grown 8.8% in the past five years, better than the industry average of 5.9%. The expected long-term earnings growth rate is 11.6%.

Mixed Analyst Sentiment on VOYA

The Zacks Consensus Estimate for 2026 has moved south 2.1%, while 2027 earnings have moved north 1.7%, in the past 30 days.

Factors Acting in Favor of VOYA

VOYA’s earnings are driven by its solid segmental performances across Retirement, Investment Management and Employee Benefits segments. These businesses represent higher-growth, capital-light and higher-return units, bolstering the company’s solid presence in the market.

The Retirement segment is experiencing significant growth, driven by higher revenues, favorable market impacts, higher alternative investment income, active portfolio management, positive defined contribution flows and disciplined management of spend. Management expects strong commercial momentum in retirement, driven by robust sales, more than 95% retention and new plan implementations.

Management described the OneAmerica retirement acquisition as highly successful, generating returns above 30%. It has meaningfully strengthened the scale and earnings power of the Retirement business, which now serves nearly 10 million Retirement accounts.

The Investment Management segment should benefit from higher investment capital returns, primarily driven by overall market performance, higher fee-based revenues, strong commercial momentum and disciplined management of spend. Voya Financial remains confident of sustaining more than 2% organic growth. Management also highlighted continued strength in retail income and growth strategies. VOYA is constantly taking strategic steps to ramp up 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.

The Employee Benefits segment of the insurer is likely to gain from improving Stop Loss underwriting and pricing, reserve releases, margin recovery, a smaller block of business, lower premium-driven expenses, favorable Group Life claims experience, higher alternative investment income and active portfolio management.

The company’s capital levels remain strong. In the first quarter of 2026, VOYA generated approximately $200 million of excess capital and returned that amount to shareholders through share repurchases and dividends. It also executed an additional $150 million of share repurchases in the second quarter, with $413 million remaining under its authorization. Supported by strong free cash flow generation, ROE above 18% and disciplined capital deployment, the company remains well positioned to enhance shareholder value.

Risks for VOYA

The company plans to invest up to $75 million of excess capital in 2026 to strengthen its wealth management platform. These investments are expected to create a near-term earnings drag and reduce Retirement segment margins by about 200 basis points.

VOYA faces intense competition from broker-dealers, financial advisors, diversified financial institutions and start-up financial services providers, which could result in increased pricing pressure on certain products and services.

Voya Financial's long-term debt rose to $1.9 billion in the first quarter of 2026, up 26% from year-end 2025, causing the financial leverage ratio to deteriorate 220 basis points year over year to 29.7%. Higher leverage could weigh on future earnings and returns.

Conclusion

Voya Financial is well-positioned for strong earnings growth across all three business segments, positive net flows, favorable retention and strategic partnerships. It should continue to benefit from financial flexibility and effective capital deployment. However, high competition and rising debt remain concerns.

Given the mixed analyst sentiment, 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.

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This article originally published on Zacks Investment Research (zacks.com).

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