On Monday, Cigna Corporation (NYSE:CI) received a boost from Jefferies as the firm raised its price target on the healthcare company's shares to $407 from $385, while reiterating a Buy rating. The adjustment follows Cigna's notable outperformance in its medical loss ratio (MLR), which surpassed that of other managed care organizations (MCOs) significantly, even with a sizeable additional reserve for Change Healthcare (NASDAQ:CHNG). This achievement has been seen as a positive sign for the company's commercial safety in the near term.
Cigna's Evernorth (EN) segment, however, showed weaker margins in both its pharmacy benefit management (PBM) and services & care delivery (S&C) businesses. The segment faced greater investments than anticipated for onboarding and growth. Despite this, the potential for upside appears to be more substantial in Cigna's healthcare segment. A stronger second-quarter performance from Evernorth could alleviate some of the pressure expected for the second half of the year.
Jefferies has also made a slight upward adjustment to its earnings per share (EPS) estimate for Cigna in 2025, increasing it by $0.03. This revision suggests a modestly more optimistic outlook for the company's financial performance in the upcoming year. Cigna's recent financial results and the updated price target reflect the company's current position in the market and its prospects for future growth.
InvestingPro Insights
With the recent price target boost from Jefferies, Cigna Corporation (NYSE:CI) demonstrates resilience and potential in the healthcare market. According to InvestingPro data, Cigna's market capitalization stands robust at $97.01 billion, and the company's revenue growth over the last twelve months as of Q1 2024 is an impressive 11.67%, highlighting its ability to expand effectively. Moreover, a look at the company's dividend growth reveals a significant increase of 13.82% in the same period, reinforcing Cigna's commitment to returning value to shareholders.
InvestingPro Tips reveal that Cigna has been a strong performer with a high shareholder yield and consistent dividend payments for 43 consecutive years. The company's management has also been actively buying back shares, which can be an indicator of confidence in the company's value. Additionally, Cigna's valuation implies a strong free cash flow yield, which is a positive signal for investors looking for companies with healthy cash generation capabilities.
For those considering an investment in Cigna, there are more insights to explore. InvestingPro offers additional tips, including detailed analysis on earnings revisions and stock volatility, which could further inform investment decisions. With the use of the coupon code PRONEWS24, readers can receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of data and expert insights. Visit https://www.investing.com/pro/CI for a deeper dive into Cigna's financial health and market standing.
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