CIGNA (CI) PT Bumped to $150 at Leerink Partners on Take-Out Optionality
Leerink Partners analyst Ana Gupte lifted her price target on Outperform CIGNA (NYSE: CI) to $150.00 (from $145.00) following reports the company rejected a $175 per share offer from ANTM (OP).
Gupte commented, "We see the strategic value of this deal and estimate high single digit accretion in Year 3 from CI's targeted FL and TX MA exposure, strong ASO plus Stop loss product, Specialty offerings and international growth. We see CI as likely to be a target for either ANTM or AET (OP), though view AET as more likely given our understanding of Senior Management's personal aspirations. While UNH (OP) is reported to have interest in CI, we do not see that as supporting the aspirations of CEO David Cordani. The wild card remains however that CI may become HUM's (OP) dance partner, and while likely accretive would not be as attractive for shareholders, as here we estimate mid to high single digit EPS accretion by Year 3. We expect that to be less likely, given CI would likely have to divest business in Houston and South Florida from legacy HealthSpring Medicare Advantage (MA). We raise our Price Target for CI to $150 given take-out optionality."
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Shares of CIGNA closed at $153.43 yesterday.