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Cigna (CI) Valuation Check After Legal Probe and Rising Medical Cost Ratio Pressure

Simply Wall St · 2d ago

After Cigna Group (CI) reported third quarter results showing a higher Healthcare Medical Cost Ratio that pointed to slimmer future margins, the stock dropped about 17%, drawing legal scrutiny from Levi and Korsinsky.

See our latest analysis for Cigna Group.

That sharp post earnings sell off stands in contrast to Cigna Group's relatively steady share price performance this year, with a modest year to date share price return and a muted one year total shareholder return signaling fading momentum rather than a clear recovery trend.

If this legal overhang has you reassessing your healthcare exposure, it could be a good time to explore other opportunities across healthcare stocks and see how they stack up.

With earnings pressure, legal questions, and only modest long term returns, investors now face a key dilemma: is Cigna Group trading at a meaningful discount to its prospects, or is the market already pricing in future growth?

Most Popular Narrative: 16% Undervalued

With Cigna Group last closing at $274.86 against an implied fair value of about $326, the most followed narrative frames this pullback as a potential mispricing rather than a structural breakdown.

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, which together could support sustained improvement in overall net margins and earnings per share.

Read the complete narrative.

Curious how steady, mid single digit growth, rising margins, and a leaner share count can still imply upside from here? The narrative lays out a detailed earnings roadmap, a lower future valuation multiple than the wider sector, and a long runway for buybacks contributing to per share value. Want to see the exact assumptions behind that spread to fair value?

Result: Fair Value of $326.26 (UNDERVALUED)

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

However, persistent regulatory pressure on PBMs and Cigna's pivot away from faster growing government programs could squeeze margins and constrain the potential upside.

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

Build Your Own Cigna Group Narrative

If you see the story differently or prefer to dive into the numbers yourself, you can build a custom view in just minutes with Do it your way.

A great starting point for your Cigna Group research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

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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.