He also trimmed his share-price target to $225 from $240.
Cigna shares recently traded at $205.96, down 4%. They have fallen 15% in the last three months.
Cigna deserves credit for successfully integrating Express Scripts after the 2018 acquisition, cutting its debt load and dumping lagging businesses, Fischbeck said, according to MarketWatch.
But growth is now the issue, he said. "Cigna's business mix has the slowest end-market growth of any managed-care organization we cover, dominated by commercial and pharmacy benefit manager services and therefore requires consistent [market-]share gains to match peer growth."
Cigna's third-quarter guidance looks "especially at risk,” thanks to troubling managed-care organization (MCO) loss ratios, Fischbeck said.
Morningstar analyst Julie Utterback puts fair value at $274 for the stock.
“Potential healthcare policy changes look set to expand U.S. insurance rolls through existing programs like the individual exchanges and Medicaid,” she wrote in a commentary last month.
“That expansion provides opportunities for managed-care organizations and caregivers, which should largely offset (even override, in some cases) the potential U.S. corporate tax rate increase needed to pay for various U.S. government initiatives.”
Further, “With the public option not being considered in potential policy changes, we think the policy landscape is rife with opportunity rather than risk for MCOs and caregivers,” Utterback said.
“We think the best values in these sectors are Centene (CNC) - Get Centene Corporation Report, Cigna, and Fresenius Medical Care (FMS) - Get Fresenius Medical Care AG & Co. KGaA Sponsored ADR Report.”