Cigna (NYSE:CI), a healthcare insurance firm, has terminated its merger plans with Humana (NYSE:HUM) following shareholder resistance. The mega-merger would have established a multi-billion-dollar behemoth with a significant presence in the health insurance sector. Nonetheless, the Wall Street Journal reported that the deal unraveled due to disagreements between the companies on pricing and other financial terms.
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Per the report, Cigna is set to enhance its presence in the health insurance sector through smaller, bolt-on acquisitions. Additionally, Cigna’s Board of Directors approved a new share buyback plan worth $10 billion. The new authorization elevates the company’s overall share repurchase authority to $11.3 billion.
It’s worth highlighting that Cigna plans to allocate a significant portion of its discretionary cash for share repurchases in 2024. This includes buying back at least $5 billion worth of common stock by the first half of 2024. Moreover, a portion of this buyback will be made through an accelerated share repurchase program in the first quarter of 2024.
In light of these developments, let’s understand where Cigna stock could head over the next 12 months.
What is the Price Forecast for Cigna?
Cigna stock has trended lower since the news of its merger with Humana came out. Thus, the company opting to pull out of the deal could positively impact the stock. Also, the company’s return of cash to its shareholders via share buybacks will likely act as a catalyst. This is reflected in analysts’ average price target.
Cigna stock has a Moderate Buy consensus rating on TipRanks, reflecting five Buy and seven Hold recommendations. Further, the average CI stock price target of $344 indicates that it has the potential to rise by 32.92% from current levels.
