Credit Suisse Starts Voya Financial (VOYA) at Outperform; 'Top Pick'
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Credit Suisse initiates coverage on Voya Financial (NYSE: VOYA) with a Outperform rating and a price target of $39.00 and named the stock its top pick in the sector.
Analyst John Nadel commented, "We are initiating VOYA with an Outperform rating and one of our top picks as we see attractive risk/reward in shares at current levels. In our view, VOYA’s ongoing businesses are currently under-earning and we see upside to ROE over time. Through the end of 2Q16, the company retired nearly 25% of diluted shares since its IPO in mid-2013, and in each 2017/18E, we are estimating $600m in share repurchases, which we think can translate to a reduction in shares of 9-10% annually. Additionally, we think VOYA screens attractively on a variety of valuation metrics at less than 7x adjusted 2017E EPS and 80% of BVPS (excl. AOCI/DTA/CBVA). The stock also screens among the cheapest in our coverage on 2017/18E adjusted free cash flow yield, benefiting from a business mix that should sustain a high level of free cash flow generation as well as the benefit of utilizing its sizeable DTA over time."
Shares of Voya Financial closed at $30.26 yesterday.
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