In a report released today, Kevin Fischbeck from Bank of America Securities reiterated a Buy rating on Cigna, with a price target of $378.00.
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Kevin Fischbeck has given his Buy rating due to a combination of factors related to Cigna’s strategic positioning and financial outlook. He believes that the market has misunderstood the implications of Cigna’s transition to a rebate-free model for its Pharmacy Benefit Manager (PBM) business. Despite concerns about potential margin compression, Fischbeck notes that this model differentiates Cigna from its competitors and positions it as an attractive investment opportunity. He highlights that the company’s PBM earnings have become a smaller part of its total earnings, which reduces legislative risks and enhances the company’s valuation potential.
Fischbeck also points out that Cigna’s current trading price suggests significant upside potential. He argues that the company’s move away from rebates should improve its earnings multiple, and the stock is undervalued compared to its historical earnings range. Additionally, upcoming financial results and strategic disclosures are expected to provide clarity and act as catalysts for stock performance. With a strong free cash flow yield and potential for stock buybacks, Fischbeck sees Cigna as a compelling investment choice.
According to TipRanks, Fischbeck is a 4-star analyst with an average return of 3.7% and a 60.70% success rate. Fischbeck covers the Healthcare sector, focusing on stocks such as Humana, UnitedHealth, and Centene.
In another report released on November 13, TR | OpenAI – 4o also upgraded the stock to a Buy with a $300.00 price target.