Piper Jaffray analyst Sarah James likes the set-up for Cigna (CI) in 2019. The company has built 25c-50c of conservatism into its earnings guidance and has potential for a “strong” 2020 driven by better cost trend control, its specialty business, and working down the $200M stranded overhead cost from Anthem’s departure, James tells investors in a research note. Further, the analyst does not have the pharmacy benefits manager volume coming back in-house from UnitedHealth (UNH) in her numbers yet, which she sees as “likely upside to 2021.” The analyst also believes Cigna “screens as cheap” at 10.6 times expected 2020 earnings. James reiterates an Overweight rating on the shares with a $227 price target.
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