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On Wednesday, Guggenheim Securities initiated coverage of CIGNA Corporation (NYSE:CI) with a Buy rating and set a price target of $384.00 per share. The firm's analysis highlighted CIGNA's flexible and capital-efficient approach to its offerings in medical and pharmacy benefit management. According to InvestingPro data, CIGNA maintains strong financial health with an overall score of "GREAT" and trades at attractive valuations relative to peers. The firm's strategy provides CIGNA with aligned incentives and adaptability as the healthcare system continues to evolve.
The research note pointed out that CIGNA's limited exposure to government end-markets shields it from the market pressures and uncertainties that affect Managed Care Organizations (MCOs) involved with Medicare Advantage (MA), Prescription Drug Plans (PDP), and Medicaid. With revenue growth of 26.6% in the last twelve months and a robust market position as a prominent player in the Healthcare Providers & Services industry, CIGNA has demonstrated resilience. However, the firm acknowledged that ongoing scrutiny of Pharmacy Benefit Managers (PBMs) could partially counterbalance these advantages.
Guggenheim also underscored the robust earnings potential of CIGNA's Evernorth health services platform, which is expected to benefit from a significant runway for specialty and biosimilar adoption, as well as the continued maturation of major client onboarding within its PBM business. The firm's outlook for Evernorth is positive, with expectations of strong contributions to CIGNA's earnings.
The note further emphasized CIGNA's meaningful capital deployment flexibility, which is seen as a key factor in augmenting shareholder returns. According to InvestingPro, management has been aggressively buying back shares, and the company has maintained dividend payments for 44 consecutive years, with a recent dividend growth of 22.8%. Guggenheim projects a long-term earnings per share (EPS) growth target for CIGNA of 10%-14%. The combination of these factors, along with what Guggenheim considers an attractive valuation relative to the company's growth outlook, formed the basis for the Buy rating initiation. For deeper insights into CIGNA's valuation and growth prospects, investors can access comprehensive analysis through InvestingPro's detailed research reports, available for over 1,400 US stocks.
In other recent news, Cigna Corporation has announced significant leadership changes aimed at enhancing customer focus and accelerating growth. Brian Evanko has been appointed as President and Chief Operating Officer, while Ann Dennison takes on the role of Executive Vice President and Chief Financial Officer. The company also reaffirmed its full-year 2025 financial outlook, projecting a consolidated adjusted income from operations of at least $29.50 per share. Additionally, Cigna's Evernorth segment is expected to achieve a pre-tax adjusted income from operations of at least $7.2 billion, with Cigna Healthcare projected at $4.1 billion or more.
In related developments, the lawsuit filed by the U.S. Federal Trade Commission against pharmacy benefit managers, including Cigna's Express Scripts, is set to resume. The case had been paused due to the recusal of FTC officials but is now moving forward. On the analyst front, TD Cowen reiterated its Buy rating for Cigna with a price target of $380, citing positive impacts from the company's recent business sale. Cantor Fitzgerald raised its price target for Cigna to $365, maintaining an Overweight rating, while Bernstein kept a Market Perform rating with a $323 target, reflecting steady expectations for the company's stock performance.
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