It’s a string of mixed news for commercial health insurer Cigna Group (NYSE:CI), but investors weren’t feeling any of that positive sentiment at all. A handful of wins in inpatient medical activity, Medicaid enrollment figures, and a dodged malpractice bullet still weren’t enough for investors, who sent shares down fractionally in the closing minutes of Tuesday’s trading.
Cigma led off with a big one, noting that it’s looking for the rest of 2024 to feature higher-than-normal numbers on inpatient medical activity. While at the Goldman Sachs Annual Global Healthcare Conference, Cigna’s chief financial officer, Brian Evanko, looked for a trend that started forming with the second quarter—namely, “elevated” levels of inpatient activity—to continue into the third quarter and “…the balance of the year.”
These remarks come at a time when insurers are becoming concerned about medical costs. With inpatient rates likely to continue staying high, that could mean higher costs ahead.
But Then The Good News
Thankfully, it wasn’t all troubling. Reports noted that Medicaid enrollments were down. There were also signs that Cigna was improving its market share, and revenue was already up 23.3% against the previous year in recent comparisons. Taken together, that means more customers looking for alternative healthcare insurance and willing to potentially buy from Cigna.
In addition, Cigna dodged a bullet in a potential malpractice case. A winery worker who was preparing to get throat surgery canceled before Cigna agreed to cover it. Cigna was originally calling the treatment “experimental,” which led to the worker alleging negligence on Cigna’s part. A judge, meanwhile, disagreed, and that let Cigna off the hook.
Is Cigna Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on CI stock based on 11 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 28.6% rally in its share price over the past year, the average CI price target of $395 per share implies 16.94% upside potential.
