Cigna (CI): Assessing Valuation After PBM Margin Pressure Prompts Analyst Price Target Cuts

Cigna Group (CI) has flagged upcoming margin pressure in its pharmacy benefit management business through 2026 and 2027, as it adopts a rebate-free pricing approach and renews contracts under tighter terms. Investors are already weighing how these changes could affect growth and valuations going forward.

See our latest analysis for Cigna Group.

Cigna Group’s share price rebounded 8.3% over the past week, recovering part of a sharp 12% drop in the last month that followed updates on tighter PBM margins and analyst price target cuts. Despite a year marked by strengthened leadership and upbeat earnings, momentum is still weighed down by a 15.7% decline in total shareholder return over the past twelve months.

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So with Cigna trading close to 25% below the average analyst price target, is the market overlooking its earnings resilience and future growth, or is the margin squeeze already fully reflected in the current share price?

Most Popular Narrative: 24% Undervalued

According to the most widely referenced narrative, Cigna Group’s fair value stands well above its last close, pointing to meaningful upside. This invites a closer look at what underpins such a valuation and why the narrative diverges from market sentiment.

Cigna is capitalizing on the growing demand for specialty pharmacy and care services, particularly as chronic diseases and complex treatments become more prevalent. The double-digit revenue growth in CuraScript and Accredo positions the company to capture an expanding portion of the high-growth $400B+ specialty space, supporting long-term revenue and earnings growth.

Read the complete narrative.

Curious how this narrative sets such a high bar? The main story is rooted in bold projections for revenue expansion and stronger future profit margins. Find out what aggressive financial drivers are shaping this bullish valuation.

Result: Fair Value of $349.04 (UNDERVALUED)

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

However, considerable risk remains if new regulation reshapes the PBM model or if stubborn cost pressures hinder Cigna’s ability to deliver margin expansion as planned.

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

Build Your Own Cigna Group Narrative

Feel free to dig into the numbers and shape your own view. A custom narrative is just a few minutes away if you want to approach things differently. 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.

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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.

Companies discussed in this article include CI.

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