Cigna Earnings: Decent Results Keep Company on Track To Meet 2023 Goals

Narrow-moat Cigna turned in solid second-quarter results and largely maintained its 2023 outlook, which will likely keep our $344 fair value estimate intact. Shares appear moderately undervalued, probably reflecting the renewed regulatory risks in its pharmacy benefit management business. However, those risks appear manageable, as PBMs like Cigna will probably be able to convert most of their rebate or spread-based contracts (about 11% of profits) to fee-based relationships, if necessary.