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Cigna Remains Well-Positioned to Grow Its Business Despite Q4 Earnings Miss, RBC Capital Says

· 02/05/2021 04:55

09:41 AM EST, 02/05/2021 (MT Newswires) -- Cigna (CI) is well-positioned to continue growing its Medicare Advantage business thanks to a strong performing Evernorth segment and its resilient commercial business, RBC Capital Markets said Friday.

The insurance company recently reported Q4 adjusted EPS of $3.51, down from $4.31 a year ago. Analysts polled by Capital IQ projected EPS of $3.69, while RBC analysts expected $3.70. The miss was largely attributed to the negative impact of the ongoing COVID-19 pandemic.

That said, Cigna's long-term earnings growth target of 10% to 13% remains intact, the analysts said, as the company's integrated model likely will perform well, coupled with strong cash flow and proceeds from the divestiture of its Group Life and Disability insurance unit.

"Cigna is positioned well to invest in organic growth and further expand its offering while continuing to deliver value to shareholders through buybacks and the recently instituted dividend," the analysts said.

RBC adjusted its 2021 EPS forecast to $20.16 from the prior outlook of $20.83. It also lowered its price target to $265 from $270, while reiterating its outperform rating on the stock.

Price: 206.82, Change: +1.44, Percent Change: +0.70