Deutsche Bank analysts upgraded CIGNA (NYSE:CI) from Hold to Buy, adjusting the price target upwards from $355.00 to $370.00.
The analysts explained the upgrade by highlighting their increased confidence in Cigna’s ability to meet the 2025 EPS estimates without the hindrance of its underperforming Medicare Advantage (MA) segment. The new price target reflects a valuation multiple of 13 times (previously 12.5 times) the 2024 EPS estimate of $28.42. This adjustment accounts for the positive revision bias of up to 9% in EPS estimates, driven by the infusion of capital and a continued strategy focused on accretive tack-on mergers and acquisitions (M&A) and share repurchases.
The analysts’ investment thesis on Cigna centers on its valuation, anticipating that investors would increasingly value the company’s exposure to the more profitable, albeit slower-growing, commercial market compared to the government-pay sector.