Voya Financial an Inflation Net Beneficiary – Piper Sandler

By Sam Boughedda

Piper Sandler upgraded shares of Voya Financial (NYSE:) to Overweight from Neutral, increasing the price target to $65 from $70 per share in a note Friday.

Analysts pointed to a number of reasons for the upgrade, including Voya’s acquisition of Allianz Global Investors’ (AGI) (ETR:) U.S. funds. They said the deal offers Voya “enhanced distribution with limited FX exposure while offering revenue protection from flow leakage.”

They also said Voya is an inflation net beneficiary across its franchise due to its product portfolio. In addition, they explained that “over-indexing to government, education & healthcare sectors” insulates the company relative to peers should the response to inflation and recessionary concerns be a reduction in employment levels.

“The upcoming management change represents continuity with focus paid towards free cash conversion,” added the analysts. “Ultimately, VOYA’s valuation is meaningfully below those life insurers with sizable asset management operations.”

Voya shares are up over 1% Friday.

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