BofA on CIGNA (CI): 'Quarter and outlook disappoint, valuation pressured'
BofA Securities analyst Adam Ron reiterated a Buy rating and $420.00 price target on CIGNA (NYSE: CI).
The analyst comments "CI unexpectantly missed 4Q earnings by 13% in the quarter ($1.03), and lowered its view of 2025 by $1.74 (6%). With the new outlook, the company is now only set to grow EPS 8% vs prior expectations of 10% (even off the lower base), and 10-14% LT EPS outlook that the company only just raised back in March. The disappointing performance at the health plan and even the PBM to a lesser extent raise concerns, though we note that valuations are already somewhat pressured with the company trading at 9.3x (based on indicated premarket price) its new outlook, and 8.5x 2026 if we assume just 10% growth, limiting downside in our view. As such, we reiterate our Buy rating as we asymmetric potential upside over the next year if CI can grow off this base and improve its multiple back into the 10-12x range as fears from PBM reform are likely overblown."
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Shares of CIGNA closed at $303.31 yesterday.