Will These Downgrades Hurt Cigna (CI) Today? (Update)

Update (9:45 a.m.): Updated with Monday market open information.

NEW YORK (TheStreet) -- Both Credit Suisse and Jefferies lowered their target prices on Cigna  (CI). Credit Suisse dropped its price to $91, cut its estimates and set an "outperform" rating. The firm cited a likely increase in margin pressure as the reason for the reduction.

Jefferies cut its target price to $86 and set a "hold" rating. The firm cited elevated MA costs.

The stock was falling 0.99% to $76.70 at 9:43 a.m. on Monday.

---------- 

Separately, TheStreet Ratings team rates CIGNA CORP as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CIGNA CORP (CI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 43.07% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • CIGNA CORP has improved earnings per share by 21.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CIGNA CORP increased its bottom line by earning $5.61 versus $4.59 in the prior year. This year, the market expects an improvement in earnings ($6.88 versus $5.61).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Health Care Providers & Services industry average. The net income increased by 18.7% when compared to the same quarter one year prior, going from $466.00 million to $553.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.8%. Since the same quarter one year prior, revenues rose by 10.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels.
  • You can view the full analysis from the report here: CI Ratings Report

If you liked this article you might like

Healthcare Management Stocks Look Too Pricey for Activists

The Stock That Crashed 25% Overnight Has a Lesson to Teach Us: Market Recon