What Happened?
Shares of health insurance company Cigna (NYSE: CI) jumped 3.5% in the afternoon session after analyst firm Bernstein raised its price target on the stock to $381 from $371, citing a positive outlook. Bernstein maintained its "Outperform" rating on Cigna.
The firm's optimism is based on the company's ability to manage medical costs and the strong performance of its Evernorth division. Analysts at the firm also projected a better-than-consensus medical loss ratio, which is a key measure of profitability for health insurers, and forecasted a 9.5% adjusted earnings per share growth rate through 2030. The new price target suggests significant potential upside from the stock's previous closing price.
The shares were trading at $304.26, up 3.7% from the previous close.
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What Is The Market Telling Us
Cigna’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 14.3% on the news that the company reported underwhelming third-quarter results. Revenue grew 9.5% year-on-year to $69.75 billion, beating estimates by 3.6%.
Adjusted earnings per share came in at $7.83, which was 2.5% ahead of the consensus forecast. However, the positive results were overshadowed by concerns about profitability and future growth. The company's operating margin declined to 3% from 4% a year ago, continuing a multi-year downward trend in profitability. Additionally, while Cigna's full-year earnings guidance was in line with expectations, forecasts for revenue growth over the next 12 months point to a significant slowdown. This, combined with a slight dip in customer numbers from the previous quarter, likely prompted investors to look past the quarterly beat and focus on potential challenges ahead.
Cigna is up 9% since the beginning of the year, and at $304.26 per share, it is trading close to its 52-week high of $311 from October 2025. Investors who bought $1,000 worth of Cigna’s shares 5 years ago would now be looking at an investment worth $1,292.
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