Guggenheim has reaffirmed its support for Eli Lilly by increasing the company's price target to $936, while maintaining a Buy rating. This decision comes after evaluating the dynamics within the GLP1 market for the remainder of the year. A significant development in this sector is the updated agreement announced on Wednesday involving Cigna's (CI, Financial) Evernorth, which alongside Express Scripts, will ensure open access for Wegovy and Zepbound through the end of 2026. The pricing for these products aligns with Eli Lilly's standard price concessions. The firm sees both Eli Lilly and Novo Nordisk as well-positioned to achieve their 2025 targets. However, there is an assumption that Novo Nordisk might hit the lower end of its guidance, facing possible risks to its sales and earnings in the upcoming years if GLP1 prescriptions do not experience significant growth.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 23 analysts, the average target price for The Cigna Group (CI, Financial) is $375.35 with a high estimate of $407.00 and a low estimate of $330.60. The average target implies an upside of 20.04% from the current price of $312.68. More detailed estimate data can be found on the The Cigna Group (CI) Forecast page.
Based on the consensus recommendation from 26 brokerage firms, The Cigna Group's (CI, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for The Cigna Group (CI, Financial) in one year is $462.52, suggesting a upside of 47.92% from the current price of $312.68. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the The Cigna Group (CI) Summary page.
CI Key Business Developments
Release Date: May 02, 2025
- Total Revenue: $65.5 billion for the first quarter.
- Adjusted Earnings Per Share (EPS): $6.74 for the first quarter.
- Full-Year EPS Guidance: Raised to at least $29.60.
- Evernorth Revenue: $53.7 billion for the first quarter.
- Evernorth Pretax Adjusted Earnings: $1.4 billion, a 5% increase.
- Specialty and Care Services Revenue: Up 19% to $239 billion.
- Pharmacy Benefit Services Revenue Growth: 14% increase.
- Cigna Healthcare Revenue: $14.5 billion for the first quarter.
- Cigna Healthcare Pretax Adjusted Earnings: $1.3 billion.
- Medical Care Ratio (MCR): 82.2% for the first quarter.
- Debt-to-Capitalization Ratio: 43.1% as of March 31.
- Share Repurchases: 8.2 million shares for approximately $2.6 billion as of May 1.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Cigna Group (CI, Financial) reported strong first-quarter 2025 results with total revenue of $65.5 billion and adjusted earnings per share of $6.74.
- The company raised its full-year EPS guidance estimate to at least $29.60, reflecting confidence in its business performance.
- Evernorth, The Cigna Group's Health Services portfolio, showed double-digit revenue growth, driven by strong pharmacy benefit services and specialty pharmacy capabilities.
- Cigna Healthcare achieved strong revenue performance across its US employer and international health businesses, with a 9% growth in its Select segment customers.
- The company is actively addressing societal challenges in healthcare, such as access, affordability, and clinical safety, through innovative solutions like EnCircleRx, EnReachRx, and EnGuide.
Negative Points
- The Cigna Group (CI) recorded net after-tax special item charges of $229 million in the first quarter, impacting earnings per share by $0.84.
- The divestiture of the Medicare businesses to HCSC closed later than planned, which modestly benefited first-quarter earnings but increased the medical care ratio by approximately 100 basis points.
- The company anticipates elevated medical cost trends in 2025, with continued pressure in specialty and behavioral categories.
- The Stop Loss business is expected to have an elevated medical care ratio for the full year, consistent with previous guidance.
- The Arkansas bill poses challenges to The Cigna Group's business model, potentially decreasing access, reducing choice, and increasing costs for citizens.
