VOYA Stock Trading at a Discount to Industry at 0.98X: Time to Buy?

Voya Financial, Inc.’s VOYA shares are trading at a discount compared with the Zacks Life Insurance industry. Its forward price-to-book value of 0.94X is lower than the industry average of 1.81X, the Finance sector’s 4.24X and the Zacks S&P 500 composite’s 8.31X. The stock has a Value Score of A. This style score helps find the most attractive value stocks. 

The insurer has a market capitalization of $6.43 billion. The average volume of shares traded in the last three months was 0.9 million. The insurer has a solid track record of beating earnings estimates in three of the past four quarters and missing in one, with an average of 13.09%.

Shares of Reinsurance Group of America, Incorporated RGA, Lincoln National Corporation. LNC and Manulife Financial Corp MFC are also trading at a discount to the industry average.

VOYA’s Price Performance

Shares of Voya Financial have lost 3.4% in the past year against the industry’s growth of 5.9%.

VOYA’s Growth Projection Encourages

The Zacks Consensus Estimate for Voya Financial’s 2026 earnings per share indicates a year-over-year increase of 11.4%. The consensus estimate for revenues is pegged at $1.39 billion, implying a year-over-year improvement of 3.6%.  

The consensus estimate for 2027 earnings per share and revenues indicates an increase of 16.3% and 6.1%, respectively, from the corresponding 2026 estimates.  

Earnings have grown 8.8% in the past five years, better than the industry average of 8.4%. The expected long-term earnings growth rate is 15.1%.

Average Target Price for VOYA Suggests Upside

Based on short-term price targets offered by 10 analysts, the Zacks average price target is $85.40 per share. The average indicates a potential 25.4% upside from the last closing price.

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 reflect higher-growth, capital-light and higher-return units, boasting the company’s solid presence in the market.

The Retirement segment is steadily witnessing significant growth on the back of higher revenues reflecting onboarded OneAmerica assets, favorable market impacts, higher alternative investment income and active portfolio management, positive defined contribution flows, as well as disciplined management of spend. Given continued commercial momentum, margins remain above the long-term targets. This, in turn, should drive higher fee income, strong spread income and prudent management of spend. 

The Investment Management segment should benefit from higher investment capital returns, primarily driven by overall market performance, higher fee-based revenues benefiting from strong commercial momentum and favorable market impacts and disciplined management of spend.

VOYA is constantly taking strategic steps to ramp up growth in its Investment Management segment. Voya Financial and Allianz Global Investors inked a long-term strategic partnership that added scale and diversification to Voya Investment Management.

The Employee Benefits segment of the insurer is likely to benefit from unfavorable Stop Loss claim development in the prior period, which did not repeat and a smaller block of business in the current period, lower premium-driven expenses and disciplined management of spend, and higher alternative investment income and active portfolio management.

The company’s capital levels remain strong. In 2025, the company generated more than $0.8 billion of excess capital, which was approximately 76% of after-tax adjusted operating earnings. As of Dec. 31, 2025, the estimated combined RBC ratio was 413%.

VOYA’s Capital Deployment

Operational excellence has been helping VOYA deploy capital for enhancing shareholders’ value. Other than the expenses slated for wealth management expansion, Voya uses excess capital to buy back shares. The company continues to generate strong cash flows as the growth outlook remains strong and capital expenses remain focused on business expansion and shareholder returns. As of Dec. 31, 2025, VOYA had a remaining share repurchase authorization of $562 million. VOYA expects to return between $100 million and $150 million to its shareholders in quarterly dividends and share repurchases throughout 2026, subject to market conditions.

Risks

However, the life insurer has been experiencing increased expenses due to higher policyholder benefits, interest credited to contract owner account balances, operating costs and interest expenses. If the company does not strive to generate revenue growth greater than the magnitude of the increase in expenses, the margin will continue to erode.

Conclusion

Voya Financial is well-positioned for growth on improved investment income, higher average equity markets and positive net flows, favorable retention, as well as strategic partnerships. It should continue to benefit from financial flexibility and effective capital deployment.

Voya Financial should continue to benefit from impressive dividend history, solid growth projections, optimistic analyst sentiment and attractive valuations. It is, therefore, wise to hold on to 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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