UBS maintains Cigna stock Buy rating with $390 target

On Friday, UBS analyst AJ Rice confirmed a Buy rating for Cigna (NYSE:CI) shares, maintaining the $390.00 price target. Rice provided insights following a recent investor event at the Evernorth Innovation Lab, hosted alongside Cigna management. According to InvestingPro data, the company currently trades at $315.99, with analysts’ targets ranging from $330.60 to $407.00. InvestingPro’s Fair Value analysis suggests the stock is currently undervalued. The company’s departure from the Medicare Advantage (MA) at a strategic point was highlighted as a positive move, with management showing significant optimism regarding Cigna’s current portfolio, which includes commercial healthcare, pharmacy benefit management, and specialty drug and other care services.

Rice conveyed confidence in Cigna’s ability to sustain its goal of low-double digit earnings growth over time. This outlook is partly based on the company’s strategic positioning away from the challenges facing government-related healthcare programs. The analyst’s report reflected a positive stance on the investment thesis for Cigna, citing the company’s diverse business mix as a key strength.

During the event, a major topic of interest among attendees was Cigna’s announcement regarding its GLP1 program. Rice elaborated on the program, which is designed for clients who currently do not cover GLP1s for weight management. This accounts for half of the Evernorth client base. The program aims to extend access to GLP1s, ensuring a balance in the cost-sharing between the plan sponsor and the patient, while also offering a lower net cost for GLP1s to all clients.

Cigna’s strategy with the new GLP1 offering is to broaden the availability of these treatments, which aligns with the company’s broader objectives. The analyst noted that the program is set to benefit both clients and patients by providing more accessible treatment options and managing the financial impact effectively.

In summary, the UBS analyst reiterated the Buy rating for Cigna stock, with a steady price target of $390.00. The report concluded with a positive outlook on Cigna’s potential for continued earnings growth and strategic business decisions, particularly in light of the newly announced GLP1 program. Trading at a P/E ratio of 17.35x and showing strong free cash flow yields, the company demonstrates compelling value metrics. For deeper insights into Cigna’s financial health and growth potential, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company’s valuation, growth prospects, and industry positioning.

In other recent news, Cigna Corporation reported strong first-quarter 2025 earnings, with an adjusted earnings per share (EPS) of $6.74, surpassing the consensus estimate of $6.35. The company also reported revenue of $65.5 billion, exceeding the forecast of $60.38 billion. Following these results, Cigna raised its full-year 2025 EPS guidance to at least $29.60. The increase in guidance was partly attributed to the later-than-anticipated divestiture of its Medicare business, which contributed positively to the quarter’s earnings.

Analysts have responded to Cigna’s performance with various adjustments to their price targets. Bernstein raised its target to $373 while maintaining a Market Perform rating, citing concerns about Cigna’s growth potential in its Healthcare business. Raymond (NSE:RYMD) James increased its target to $385 and reiterated a Strong Buy rating, noting the company’s better-than-expected core insurance operations. Jefferies also lifted its target to $397 and maintained a Buy rating, emphasizing the strong performance of Cigna’s Specialty segment.

Cigna’s management highlighted the company’s strategic initiatives, including the launch of biosimilars and GLP-1 drug management solutions. The company’s Evernorth segment and Healthcare division both exceeded earnings estimates, contributing to the overall strong quarterly performance. Despite the positive outcomes, some analysts expressed concerns about Cigna’s growth potential due to its limited exposure to Medicare Advantage or Medicaid.

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