"Voya is in the midst of a multi-year turnaround that provides levers to improve ROE, while the firm still trades at 80% of book value," analysts said.
Last week, the retirement, investment, and insurance company reported strong first quarter earnings of 77 cents per share on revenue of $324 million, compared to 57 cents a share on revenue of $268 million in the same quarter a year ago.
The company in the first quarter was expected to earn 75 cents per share on revenue of $309.24, according to analysts polled by Thomson Reuters.
"We reached an important and significant milestone as an independent company during the quarter as ING Group sold its remaining shares of Voya Financial," Chairman and CEO Rodney O. Martin said.
Additionally, Goldman Sachs expects Voya Financial to repurchase shares worth 20% of their market cap by 2017.
Shares of Voya Financial are down 0.6% to $44.68 in Friday's mid-day trading.
TheStreet Ratings team rates VOYA FINANCIAL INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate VOYA FINANCIAL INC (VOYA) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, attractive valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, VOYA's share price has jumped by 29.30%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, VOYA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Diversified Financial Services industry and the overall market on the basis of return on equity, VOYA FINANCIAL INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- VOYA, with its decline in revenue, slightly underperformed the industry average of 7.0%. Since the same quarter one year prior, revenues slightly dropped by 1.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- VOYA FINANCIAL INC's earnings per share declined by 21.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, VOYA FINANCIAL INC increased its bottom line by earning $9.18 versus $2.27 in the prior year. For the next year, the market is expecting a contraction of 63.3% in earnings ($3.37 versus $9.18).
- You can view the full analysis from the report here: VOYA Ratings Report