Jefferies downgrades Cigna to Hold on mounting 2027 earnings headwinds

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Jefferies downgraded Cigna to Hold from Buy, cutting its price target to $307 from $336, citing a growing list of earnings headwinds and limited catalysts that outweigh the stock's discounted valuation. The brokerage lowered its 2027 earnings estimate to $32.77 per share, about 1% below consensus, arguing that expectations remain too optimistic given uncertainty around the strategic review of EviCore and the health insurance exchange business, increasing pressure from reduced GLP-1 drug coverage, and mounting regulatory scrutiny of pharmacy benefit managers. Jefferies estimates that a potential sale or wind-down of EviCore and the HIX business could create a meaningful earnings gap, with EviCore contributing $700 million to $1 billion in adjusted operating income, or $2.20 to $3.10 per share, and warned that share buybacks would not fully offset the dilution. The firm also expects weight-loss GLP-1 drug headwinds to intensify, projecting a 2027 earnings impact of about $126 million after management disclosed a $20 million-per-quarter headwind beginning in the second half of 2026, while highlighting risks from declining membership at key pharmacy benefit clients and state-level legislation targeting PBM pricing and transparency. Jefferies acknowledged the stock trades at roughly 8.3 times consensus 2027 earnings but said the discount is warranted given weaker growth prospects, limited catalysts for multiple expansion, and ongoing execution risks as the company transitions to a rebate-free PBM model.

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