Cigna: Regulatory Overhangs Easing and PBM Model Transition Drive Clearer Profitability Outlook and Attractive Risk-Reward Supporting Buy Rating

J.P. Morgan analyst Lisa Gill has maintained their bullish stance on CI stock, giving a Buy rating today.

Lisa Gill has given his Buy rating due to a combination of factors tied to Cigna’s improving outlook and business mix. He views the company’s new rebate-free PBM model as strategically sound, with management expecting a comparable profitability profile to the legacy structure and at least half of Evernorth’s clients adopting the new approach by 2028, supported by favorable customer feedback. The emerging revenue streams, such as inflation-linked administrative fees and performance-based payments for clinical programs, are seen as durable and capable of providing incremental upside over time. Furthermore, Gill interprets the FTC settlement, new PBM regulations, and the required onshoring of GPO activities as largely manageable from a financial standpoint and as events that reduce regulatory uncertainty rather than create new earnings headwinds.
He also points to initial FY26 guidance that exceeded his prior expectations, underpinned by solid earnings cadence, disciplined expense management, and an earnings growth algorithm that remains intact despite tax and regulatory changes. The outlook for Cigna Healthcare is characterized by cautious assumptions on medical cost trends, but with evidence of pricing power and targeted margin improvement, particularly in stop-loss. Specialty and care services are expected to grow toward the upper end of their long-term range, aided by contributions from investments such as Shields Health Solutions. Taken together, Gill believes Cigna is emerging from a period of overhangs with clearer visibility on profitability, supporting his view that the stock offers an attractive risk-reward profile at current levels, justifying a Buy recommendation.

In another report released today, Bank of America Securities also reiterated a Buy rating on the stock with a $378.00 price target.

CI’s price has also changed slightly for the past six months – from $270.740 to $284.530, which is a 5.09% increase.