UBS Reiterates Buy on Cigna Corp. (CI) Following 3Q
UBS reiterated a Buy rating on CIGNA (NYSE: CI), and cut the price target to $172.00 (from $175.00), following the company's 3Q earnings report. For 2016, Cigna expects to maintain its public exchange footprint. Cigna participated in limited markets in eight states for 2015, and the company is generally maintaining that presence except that it is pulling out of Florida on-exchange market.
Analyst A.J. Rice commented, "Adjusting for $0.22 favorable PYD YTD and $0.08 of a favorable 3Rs related true-up in 2Q15, we estimate Cigna's 2015 base EPS at $8.30 (at the high end of its 2015 EPS outlook). Traditionally, Cigna has talked about 10-13% growth including capital deployment, with operating growth generally in the high single digit range. For 2016, Cigna expects to grow revenue and earnings via growth in medical customers and specialty relationships, increased operating expense efficiencies, and margin improvement in MA, partially offset by foreign exchange pressure (the full year impact of what was seen this year) in Global Supplemental Benefits business."
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Shares of CIGNA closed at $132.81 yesterday.