Analyst Whit Mayo from Leerink Partners maintained a Hold rating on Cigna and decreased the price target to $300.00 from $365.00.
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Whit Mayo has given his Hold rating due to a combination of factors impacting Cigna’s performance. The company’s second-quarter results reflected ongoing themes such as robust growth in specialty and pharmacy benefit management revenues, alongside increased cost trends and slight margin pressures. Despite these challenges, Cigna’s Evernorth division demonstrated strong revenue growth, benefiting from favorable market conditions like the rise of biosimilars and generic conversions.
However, concerns remain regarding the high medical loss ratio anticipated for the third quarter, potential pressures from stop-loss in the latter half of the year, and the implications of the Trump MFN executive order. While Cigna’s healthcare portfolio is operating within target margins, the stop-loss and Health Insurance Exchange segments are underperforming. These factors, coupled with the company’s valuation nearing historical lows, have led to a cautious outlook, justifying a Hold rating.
Mayo covers the Healthcare sector, focusing on stocks such as Universal Health, Tenet Healthcare, and Ardent Health Partners, Inc.. According to TipRanks, Mayo has an average return of -0.1% and a 44.44% success rate on recommended stocks.
In another report released on August 1, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $285.00 price target.