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Investing.com - Guggenheim lowered its price target on Cigna (NYSE:CI) to $350.00 from $388.00 on Monday, while maintaining a Buy rating on the health insurance provider’s stock. According to InvestingPro data, Cigna is currently trading at 14.4x earnings and appears undervalued based on its Fair Value analysis.
The price target reduction follows a more than 12% decline in Cigna shares since its second-quarter 2025 earnings release, compared to the S&P 500’s decline of over 2% during the same period. This occurred despite Cigna reporting results in line with expectations and reiterating its 2025 guidance.
Guggenheim cited several factors behind market concerns, including health insurance exchange cost trends, second-half 2025 pharmacy benefit management margins, commercial trend worries, healthcare medical loss ratio seasonality, and stop-loss margin recovery questions. The firm characterized these issues as "nitpicking nuances" that have disproportionately affected investor sentiment. Despite these concerns, Cigna maintains strong fundamentals with an overall "GOOD" Financial Health score from InvestingPro, and has maintained dividend payments for 44 consecutive years.
The research firm highlighted Cigna’s positive attributes, including its cash flow generation capabilities, limited government-oriented managed care organization exposure, and recent favorable pharmacy benefit management rulings in Arkansas and Oklahoma that should offset potential drug pricing pressures.
Guggenheim’s revised price target reflects broader sentiment pressures affecting managed care organizations, resulting in a target multiple below historical averages, but the firm views the recent stock decline as "unjustified" and considers the current price "a unique opportunity" with Cigna trading at less than 8 times Guggenheim’s updated 2026 earnings per share estimate.
In other recent news, Cigna Corp reported its Q2 2025 financial results, which exceeded analysts’ expectations. The company posted an adjusted earnings per share (EPS) of $7.20, surpassing the projected $7.16. Revenue also outperformed forecasts, coming in at $67.2 billion compared to the anticipated $62.66 billion. These results highlight Cigna’s ability to deliver strong financial performance despite challenging market conditions. Additionally, the company’s operational updates and future guidance were noted, though they contributed to a decline in stock value due to broader market concerns. Analysts from various firms have been closely monitoring these developments. The financial community remains attentive to how Cigna navigates its operational landscape. These recent developments are crucial for investors keeping an eye on the company’s performance and strategic direction.
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