Cigna Group’s (NYSE:CI) Evernorth Health Services announced on Tuesday a $3.5 billion investment in Shields Health Solutions, a specialty pharmacy management company.
How is CI stock doing now? Check the full analysis here.
Evernorth’s investment coincided with Shields’ establishment as a private, stand-alone company upon its acquisition by Sycamore Partners, a private equity firm.
This followed Sycamore’s acquisition of Walgreens Boots Alliance, Shields’ previous owner.
Evernorth’s investment in Shields was in the form of preferred stock and was not expected to have a material impact on Cigna’s previously issued 2025 adjusted EPS guidance of at least $29.60.
BofA Securities wrote that Cigna is a pure-play commercial insurer, the only MCO to maintain its long-term EPS growth outlook.
Also Read: UnitedHealth, Centene Hit Hard By Guidance Shock, Trump’s Medicaid Push
Its large pharmacy benefits and specialty drug businesses gave it broad exposure to rising drug spending — such as obesity treatments, biosimilars and gene therapies — without betting on individual products.
Analyst Kevin Fischbeck expects EPS to grow 10%–15% annually, offers a 9% FCF yield, and avoids peers' regulatory risks, supporting 10–15% returns.
“If the group rallies on regulatory clarity, it should draſt off of that and be up a turn or so on the multiple, and though it might underperform the depressed names if they take off, it would still be up 25%-30% in that scenario, with a lot less downside risk,” the analyst wrote on Tuesday.
BofA is positive on Alignment Healthcare, Inc. (NASDAQ:ALHC), which expects to continue to capture market share profitably with 20%-plus member growth and improving MLR as it captures “free” tailwinds from Stars in 2025 and 2026.
BofA Securities is more cautious on UnitedHealth Group Inc (NYSE:UNH) and Centene Inc (NYSE:CNC) than the Street.
BofA said strong star ratings and no further coding adjustments could allow UnitedHealth to expand margins in 2027 without the roughly $6 billion ($5.25/share) V28 headwind expected in 2026.
For Centene, potential Medicaid work requirements starting in 2026 could pressure margins, as state reimbursement rates may not account for a weaker risk pool.
CI Price Action: Cigna Group stock is up 0.22% at $301.65 at publication on Tuesday.
Read Next:
Photo: Shutterstock
