Goldman Sachs is out with a research report this morning, where it suggests buying calls on Cigna Corp. CI ahead of some key catalysts. The analyst is bullish on managed care names in general; Cigna itself is Conviction Buy rated.
The analysts cited several catalysts:
1. HHS ruling on final medical loss ratio rules
2. The mid-term election
3. Earnings
4. First-time 2011 guidance
The analyst believe being on the bull side of the fence is the way to go; he suggested buying the January $39.00 calls to gain upside exposure to the name for a net debit of $1.15.
Goldman noted, “If shares move to our analyst's price target before January expiration (much faster than our analyst estimates), we estimate the calls could be worth 4x their current value.”
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