Cigna price target lowered to $310 from $336 at Jefferies on PBM model transition

Investing.com - Jefferies has lowered its price target on Cigna stock (NYSE:CI) to $310 from $336 while maintaining a Buy rating, citing higher-than-expected costs related to the company’s pharmacy benefit management (PBM) model transition. This aligns with the broader analyst consensus of "Buy" for the healthcare provider, according to InvestingPro data.

The research firm noted that the PBM model transition proved "more involved and costly than management’s historical comments had conveyed," impacting Cigna’s financial outlook.

Despite the price target reduction, Jefferies believes market reaction to the news has been excessive, with Cigna now trading at less than 10 times earnings for most of the last five years and currently sitting "alone in the sub-9x EPS valuation basement." InvestingPro data confirms this assessment, showing Cigna’s P/E ratio at 10.8 and a steep 20.95% price decline over the past week, with shares now trading near their 52-week low.

The firm acknowledged that while Cigna’s business mix shows slower growth compared to competitors, the difference is not substantial, with the company’s specialty business "still hummin."

Jefferies estimates that the PBM transition will affect approximately 10% of Evernorth profits for one year, which it considers "probably not as bad as the market has discounted."

In other recent news, Cigna Corp reported a strong financial performance for the third quarter of 2025. The company exceeded earnings expectations with an adjusted earnings per share (EPS) of $7.83, surpassing the forecasted $7.64. Additionally, Cigna’s revenue reached $69.7 billion, which was higher than the anticipated $67.61 billion. Despite these positive results, there was a significant pre-market drop in the company’s stock, driven by investor concerns over future guidance and market conditions. These developments indicate that while Cigna’s current financial metrics are robust, external factors may be influencing investor sentiment.

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