Cigna Earnings: 2024 Outlook Merely Maintained on Solid Results From Unique MCO Business Model

Cigna turned in strong second-quarter results but merely maintained its 2024 outlook, which may have disappointed investors. However, we do not anticipate changing our $366 fair value estimate, and shares look about fairly valued. We appreciate the narrow moat surrounding Cigna's unique managed care organization business that focuses on pharmacy benefit management, specialty pharmacy services, and employer-based medical insurance, keeping it insulated from the challenges peers have faced recently in Medicare Advantage, or MA. In fact, Cigna agreed to sell its MA business to Health Care Service Corporation by early 2025, focusing on what it does best—employer-sponsored medical insurance and biopharmaceutical benefit management.