Oppenheimer analysts provided their key takeaways from Cigna Corporation (NYSE:CI) Investor Day, with the company presenting a bullish long-term view, driven by improved Evernorth dynamics.
According to the analysts, management increased its Evernorth long-term earnings growth rate target to 5-7% vs 4-6%, driven by the shift to biosimilars, which will benefit results starting in 2023, and the cross-selling opportunity, which offers $10-$20 billion in the long-term upside.
Meanwhile, Cigna Healthcare’s long-term earnings growth of 8-10% will see short-term benefits from a return to target margins (9-10%) and accelerating MA growth.
Overall, the company maintained 2022 EPS guidance of above $22.60 and a long-term EPS growth target of 10-13%, though management hopes to reach at or above the top end in the out years. According to the analysts, they continue to favor the company due to favorable industry catalysts, an attractive valuation and upside to numbers from shorter-term COVID-related pressures.