On Friday, Cigna Corporation (NYSE:CI) received an updated price target from Oppenheimer, reflecting confidence in the company's performance. The price target for the shares was raised to $400.00 from the previous $370.00 while the Outperform rating was maintained.
This adjustment follows Cigna's robust first-quarter results for 2024, which were highlighted by a solid Medical Cost Ratio (MCR) beat attributed to broad commercial strength.
Cigna's first-quarter performance was marked by higher-than-expected inpatient claims, which aligned with forecasts, and better outcomes for outpatient surgeries. The company also accounted for $650 million of excess reserves related to Change Healthcare (NASDAQ:CHNG), although only one-third of these reserves were based on claims not received by the end of the quarter.
Following the strong quarterly results, Cigna has raised its full-year 2024 guidance. The company has also shared expectations for the second quarter of 2024, projecting earnings per share (EPS) of $6.31, which is lower than the operating company's estimate of $6.88 and the Street's estimate of $6.93.
In response to Cigna's performance and updated guidance, Oppenheimer has increased its EPS estimates for the years 2024, 2025, and 2026 to $28.48, $32.05, and $35.24, respectively, up from previous estimates of $28.33, $31.71, and $34.29.
The firm cites Cigna's attractive services-based portfolio and limited exposure to Medicare Advantage as key reasons for the company's consistent performance in the healthcare space. The recommendation to investors is to consider purchasing shares after another solid quarter from Cigna.
InvestingPro Insights
Following the positive assessment by Oppenheimer, real-time data from InvestingPro further complements the optimistic outlook for Cigna Corporation (NYSE:CI). The company boasts a robust market capitalization of $97.57 billion, reflecting its significant presence in the healthcare industry. An attractive P/E ratio of 14.85, as of the last twelve months leading up to Q1 2024, suggests that the company may be undervalued relative to its earnings. Additionally, Cigna has demonstrated a strong revenue growth of 12.65% over the same period, indicating a healthy expansion in its business operations.
InvestingPro Tips highlight Cigna's strategic financial management, with the company aggressively buying back shares and raising its dividend for three consecutive years, a testament to its commitment to shareholder returns. Furthermore, the company's valuation implies a strong free cash flow yield, which can be an attractive point for investors seeking companies with solid financial health and the potential for future growth. For those interested in further insights and additional tips, InvestingPro offers more in-depth analysis, with PRONEWS24 providing an extra 10% off on a yearly or biyearly Pro and Pro+ subscription.
With Cigna trading near its 52-week high and analysts predicting profitability for the year, the company's stock appears to be maintaining a positive trajectory. Investors may find additional value in the 43 consecutive years of dividend payments, reinforcing the company's stable financial standing. For a more comprehensive understanding of Cigna's potential, there are 13 additional InvestingPro Tips available that could assist investors in making informed decisions.
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