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Investing.com - RBC Capital maintained its Outperform rating and $371.00 price target on Cigna (NYSE:CI) stock Wednesday, citing commercial utilization trends that align with the company’s expectations. According to InvestingPro analysis, Cigna appears undervalued, with the stock currently trading at $316 and showing a P/E ratio of 17.4x despite strong financials.
The investment firm held meetings with Cigna’s head of investor relations in San Francisco, where discussions addressed growing market concerns about commercial trends. RBC noted it was "pleased to learn that utilization is trending in line with expectations."
RBC believes its price target better reflects "under-appreciated value" in Evernorth’s specialty platform, particularly as competitors navigate challenges in the Medicare Advantage segment.
The firm also highlighted Cigna’s "differentiated capabilities" in GLP-1 medications for weight loss, which provide enhanced options for plan sponsors in both product offerings and plan structure.
Cigna’s approach offers plan sponsors flexibility in how they structure their healthcare benefits, according to RBC, which maintained its positive outlook on the health insurance provider.
In other recent news, Cigna Group has been active with several developments. Cigna Healthcare introduced AI-powered digital tools aimed at enhancing customer experience by providing personalized assistance and real-time cost tracking. The company also announced the addition of Michael J. Hennigan to its Board of Directors, bringing extensive experience from the energy sector. UBS analyst AJ Rice maintained a Buy rating for Cigna shares, citing confidence in the company’s strategic positioning and potential for sustained earnings growth.
Meanwhile, CVS Health (NYSE:CVS) experienced a positive development as Medicare Pharmacy Benefit Manager limits were removed from a tax bill, benefiting its Caremark division. This change is seen as reducing regulatory pressure on companies with significant PBM operations. CVS Health was among the insurers who pledged to simplify prior authorization processes in a meeting with U.S. health officials. These commitments are part of broader efforts to address healthcare administrative complexities.
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