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Cigna (NYSE:CI) continued to draw positive remarks on Wall Street as Cantor Fitzgerald and RBC Capital Markets upgraded the health insurer this week following its Q4 2023 results and its recent $3B all-cash deal to sell its Medicare business.
After its Medicare sale, Deutsche Bank upgraded the Bloomfield, Connecticut-based company last week.
Over the weekend, Cantor analyst Sarah James upgraded Cigna (CI) to Overweight from Neutral. She argued that the company has the lowest exposure to the underwriting cycle in the payor industry, as its Medicare unit sale will cut its at-risk revenue to 16%.
Citing higher confidence in future earnings growth from Cigna’s (CI) pharmacy benefits management unit, Evernorth, James lifted her P/E multiple on the stock to 11.0x. Applying it to the firm’s revised 2025 EPS estimate, Cantor indicated a target price of $372, up from $334 per share.
Meanwhile, RBC upgraded the stock to Outperform from Sector Perform and raised its price target to $354 from $327 per share, pointing to higher visibility on near-term EPS growth and share buybacks.
“We believe CI’s current >1x PE discount to its long-term average is unwarranted given the solid earnings growth visibility for 2024 and 2025,” RBC analyst Ben Hendrix wrote.
Announcing its recent agreement with non-profit health insurer Health Care Service Corporation to sell its Medicare business, Cigna (CI) said most of the proceeds from the transaction will be deployed for share buybacks.
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- Cigna lifts profit forecast as lower costs drive Q4 earnings beats
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