Buy that inflation-ready financial stock
Voya Financial’s recent acquisition of Allianz Global Investors and its product portfolio positions the company to fare well in an inflationary environment, Piper Sandler said. Analyst John Barnidge upgraded shares of insurance and investment stocks from neutral to overweight, calling the company a “net beneficiary” of inflation. Barnidge said Voya’s over-indexing in education, government and health care insulates the company in an environment of recession or wage inflation. “As such, if a fight for talent that has seen an increase in pension contributions and workforce benefits turns into cuts, the areas the company is focused on naturally have more dynamism for employment than other sectors historically,” he wrote. At the same time, the company sees value in Voya’s recent acquisition of Allianz Global Investors, which offers a host of short-term income protections. “VOYA’s acquisition of AGI’s U.S. fund provides enhanced distribution with limited currency exposure while providing income protection against post-close leaks,” Barnidge said. Shares of Voya are down about 8% this year and are nearly 19% off their 52-week highs. Piper Sandler’s $70 price target implies that shares could rebound around 15% from Thursday’s close. – CNBC’s Michael Bloom contributed reporting.
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