Strong Fundamentals Make Cigna (CI) a Compelling Value Play, Says Guggenheim

The Cigna Group (NYSE:CI) is one of the deep value stocks to buy according to analysts. Cigna’s shares are up about 4% year-to-date, lagging the broader market. Still, the company’s favourable product mix and lack of exposure to Medicaid and Medicare have helped it avoid steeper losses seen elsewhere in the sector.

On August 4, a Guggenheim analyst trimmed his price target on Cigna to $350 from $388 but kept a Buy rating on the stock. He acknowledged that investors have been focused on several issues, foremost being the cost trends in the health insurance exchanges and pressure on pharmacy benefit management (PBM) margins, which have weighed on the sector outlook.

A successful independent agent or broker discussing the benefits of life and health insurance with a customer.

Moreover, the analyst highlighted some other concerns over commercial medical trends, seasonality in medical loss ratios, and uncertainty about stop-loss margin recovery.

In his view, however, these are relatively minor factors that have weighed more heavily on sentiment than fundamentals warrant. The analyst pointed to Cigna’s strengths that may be getting overlooked. The company continues to generate strong cash flow, has limited exposure to government-oriented managed care, and recently secured favourable PBM rulings in Arkansas and Oklahoma that should help counter potential drug pricing challenges.

Finally, he argued that the recent pullback in Cigna’s stock is overdone. He based his argument on the fact that the shares are now trading at less than 8x his updated 2026 EPS estimate, and the company kept its 2025 guidance unchanged. In his assessment, the current valuation represents an attractive entry point for long-term investors.

Interestingly, we also highlighted The Cigna Group (NYSE:CI) as part of our article on the best defensive stocks to invest in according to analysts.

The Cigna Group (NYSE:CI) is a health services company that provides medical, pharmacy, behavioural health, dental, and supplemental insurance products.

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Disclosure: None. This article is originally published at Insider Monkey.