Cigna 'Top Pick for 2024': Analysts Change Ratings, Forecasts Following 2024 Guidance

Cigna Group CI shares were rising in early trading on Monday after the company reported its fourth-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.

Cantor Fitzgerald On Cigna

Analyst Sarah James upgraded the rating from Neutral to Overweight, while raising the price target from $334 to $372.

Cigna’s 2024 guidance implies Evernorth revenues in the range of $193 billion, which is $10 billion higher than the consensus estimates, James said in a note.

“Based on our discussions with management, we believe the CNC contract will start in full 1/1, with the $30B in revenue divided ratably through the year, in contrast to the more back-end-loaded ramp we see in consensus,” the analyst wrote. Evernorth could generate a step-up in earnings between $600 million and $1.05 billion from the CNC contract in 2025, she added.

RBC Capital Markets On Cigna

Analyst Ben Hendrix upgraded the rating from Sector Perform to Outperform, while lifting the price target from $327 to $354.

The is strong visibility into Cigna’s near-term earnings growth, supported by share repurchases, while the company has a “more solid operating backdrop this year, which includes pricing actions in the exchange book and conservative assumptions around stop-loss,” Hendrix wrote in the note.

The initial adjusted earnings guidance of $28.25 per share represents 12.6% growth, which is within the company’s 10%-13% long-term target, the analyst added. “With significant cash flow earmarked for buybacks, we expect the Humana debate to cool for the near term,” he further wrote.

Check out other analyst stock ratings.

Mizuho Securities On Cigna

Analyst Ann Hynes reiterated a Buy rating, while raising the price target from $360 to $370.

“CI's MLR guidance assumes a +90bp increase at the midpoint to 82.2%,” Hynes said. “Importantly, slightly more than half of the MLR increase is attributed to CI's stop-loss products returning to historical profitability levels with the remainder attributed to mix dynamics,” she added.

The analyst named Cigna as a “top pick for 2024,” citing the company’s “solid EPS visibility, lack of Medicaid redetermination risk, lack of Medicare Advantage underwriting risk and, most importantly, the likely passage of PBM legislation which should remove a meaningful legislative risk going forward.”

CI Price Action: Shares of Cigna had risen by 0.18% to $324.42 at the time of publication on Monday.

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