Cigna (CI) - Get Report is "one of the most compelling stocks and stories" Citigroup analysts have seen "across 20 years on the sell side," the firm said in a Sept. 26 report.

A team led by analyst Ralph Giacobbe said the Bloomfield, Conn., insurance and health-services company "combines the right goals with a strong historical track record, a sound strategy, improved positioning, and a fair and balanced growth outlook, against a severely depressed valuation."

"The combination with Express Scripts creates one of the largest integrated medical and pharmacy benefit managers in the U.S.," Giacobbe wrote. 

The stock is cheap, trading at a 27% discount to peers and 49% discount to the market, the analyst wrote. 

Cigna is trading at 8.4 times Citi's 2020 earnings per share estimate of $18.42. The shares closed Wednesday at $155.22.

Citigroup rated Cigna a buy with a $203 target price, 11 times the 2020 estimate. The target indicates upside of 31% from Wednesday's close.

Risks to the analyst's outlook? No shortage. Giacobbe cites the "potential for [an] unexpected uptick in healthcare-cost trends," competitive threats from peers, the risks inherent in integrating Express Scripts, uncertainty about retaining clients, and "general headline risk given the focus on drug pricing and the evolving pharmacy-benefit-manager model."

Separately, in a Sept. 26 statement, Cigna said it began an offer to swap notes issued by three of its subsidiaries for new Cigna-issued notes and cash.

Cigna shares fell Thursday to $149.79, down 3.5%.

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