Cigna Shares Plummet 10% After Q2 Earnings, Analyst Says Pullback is a Buying Opportunity

Cigna (CI) shares experienced a 10% drop after Q2 2025 results. TD Cowen analyst Charles Rhyee reiterated a Buy rating, seeing the pullback as an attractive entry point. He believes strength in Specialty and Care Services, as well as solid PBM operations, will offset pressures. Rhyee remains confident in the company's earnings outlook, with robust EPS growth projections for 2025 and 2026.

Cigna (CI) shares experienced a 10% drop following the release of its Q2 2025 financial results. The company reported revenue of US$67.2 billion, up 11% year-over-year, and net income of US$1.53 billion, a 1.0% decrease from the same period last year [1]. Despite the revenue growth, the company's profit margin decreased to 2.3% from 2.6% in Q2 2024, driven by higher expenses.

The company's earnings per share (EPS) of US$5.76 missed analyst estimates by 2.1%, while revenue exceeded estimates by 7.2% [1]. Looking ahead, Cigna expects revenue to grow at an average rate of 4.5% per annum over the next three years, compared to a 6.0% growth forecast for the US healthcare industry [1].

TD Cowen analyst Charles Rhyee reiterated a Buy rating on the stock, seeing the pullback as an attractive entry point. He believes the strength in Specialty and Care Services, as well as solid pharmacy benefit management (PBM) operations, will offset pressures. Rhyee remains confident in the company's earnings outlook, with robust EPS growth projections for 2025 and 2026 [2].

Over the past 12 months, Cigna shares have dropped by about 10%, while the S&P 500 has climbed by 10.2%. The company's revenue growth of 10.9% year-over-year outpaced the market average of 8.1% [2]. Cigna's free cash flow yield of 9.16% is above the market average of 2.15%, and its return on invested capital (ROIC) has improved to 8.64% [2].

However, Cigna faces several risks, including regulatory and legislative risks, medical cost inflation, elevated leverage, margin pressure, and market sentiment volatility. Analysts are generally optimistic about Cigna's prospects, with 18 out of 20 analysts rating the stock a 'Buy' or 'Strong Buy' and an average price target of US$376.56 [2].

Cigna's next earnings report is scheduled for Q3 2025, with results expected on October 30, 2025, and a conference call at 8:30 am ET [2].

References:
[1] https://finance.yahoo.com/news/cigna-group-second-quarter-2025-144702961.html
[2] https://finimize.com/content/ci-asset-snapshot