Cigna Group CI shares were on the rise in early trading on Monday following the company’s fourth-quarter results report. The results were unveiled during a compelling earnings season.
Cantor Fitzgerald On Cigna
Analyst Sarah James upgraded the rating for Cigna from Neutral to Overweight, while boosting the price target from $334 to $372. The exciting 2024 guidance from Cigna implies Evernorth revenues around $193 billion, $10 billion higher than consensus estimates, James mentioned in a note.
“Based on our discussions with management, we believe the CNC contract will start in full 1/1, with the $30B in revenue divided ratably through the year, in contrast to the more back-end-loaded ramp we see in consensus,” the analyst wrote. Evernorth could generate a step-up in earnings between $600 million and $1.05 billion from the CNC contract in 2025.
RBC Capital Markets On Cigna
Analyst Ben Hendrix upgraded the rating for Cigna from Sector Perform to Outperform, while raising the price target from $327 to $354. There is strong visibility into Cigna’s near-term earnings growth, backed by share repurchases, and the company has a “more solid operating backdrop this year, which includes pricing actions in the exchange book and conservative assumptions around stop-loss,” Hendrix shared.
The initial adjusted earnings guidance of $28.25 per share represents 12.6% growth, well within the company’s 10%-13% long-term target, added the analyst.
Mizuho Securities On Cigna
Analyst Ann Hynes reiterated a Buy rating, while raising the price target from $360 to $370. “CI’s MLR guidance assumes a +90bp increase at the midpoint to 82.2%,” Hynes said. She noted that slightly more than half of the MLR increase is attributed to CI’s stop-loss products returning to historical profitability levels. Hynes named Cigna as a “top pick for 2024,” praising the company’s “solid EPS visibility, lack of Medicaid redetermination risk, lack of Medicare Advantage underwriting risk and, most importantly, the likely passage of PBM legislation which should remove a meaningful legislative risk going forward.”
CI Price Action: Shares of Cigna had risen by 0.18% to $324.42 at the time of publication on Monday.