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Cigna (CI): Evaluating Valuation After Recent Share Price Weakness

Simply Wall St · 2d ago

Cigna Group (CI) has been drifting lower recently. That kind of slow slide often makes investors wonder if the market is overlooking a fundamentally solid healthcare business with consistent cash generation.

See our latest analysis for Cigna Group.

Over the past year, Cigna Group’s share price returns have been choppy, with a recent 7 day share price return of minus 3.57 percent and a 90 day share price return of minus 12.08 percent. However, the 5 year total shareholder return of 37.98 percent still reflects the strength of its long term cash generative model.

If this kind of healthcare steady compounder appeals to you, it is also worth exploring other healthcare stocks that could offer similar resilience or more powerful upside potential.

With earnings still growing and the shares trading below analyst targets, investors face a key question: Is Cigna now a mispriced cash machine, or is the market already baking in all of its future growth?

Most Popular Narrative: 18.3% Undervalued

Compared with Cigna Group’s last close of $268.42, the most followed narrative sees upside to a higher fair value based on long term earnings power.

The company's deliberate focus on higher margin businesses (specialty pharmacy, health services, consultative employer offerings) and proactive repricing is evident in double digit price increases and the strategic contraction in lower margin segments should drive sustained improvement in overall net margins and earnings per share.

Read the complete narrative.

Curious how modest growth assumptions, higher margins, and an earnings multiple below the sector average can still justify a meaningfully higher price? The full narrative lays out the numbers step by step, and the capital return math that ties it all together.

Result: Fair Value of $328.35 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, heavy reliance on Evernorth’s PBM model, along with growing affordability and regulatory pressures, could quickly undermine those upbeat margin and valuation assumptions.

Find out about the key risks to this Cigna Group narrative.

Build Your Own Cigna Group Narrative

If you see the story differently or want to test your own assumptions against the data, you can build a full narrative in just minutes: Do it your way.

A great starting point for your Cigna Group research is our analysis highlighting 6 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

Do not stop at Cigna, the Simply Wall St Screener can quickly surface fresh opportunities across themes and sectors so you are not left chasing yesterday’s winners.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.