Based on the provided data and recent market developments, here's a concise analysis of Cigna's valuation:
Valuation Analysis
CI's Q3 2024 P/E ratio of 32.82x appears elevated compared to its historical levels, showing a significant increase from Q2's 26.09x. However, other valuation metrics present a more balanced picture:
- EV/EBITDA at 9.40x remains relatively reasonable
- P/S ratio of 0.43x indicates attractive pricing relative to revenue
- P/B ratio of 2.30x suggests moderate premium to book value
Financial Performance
Revenue growth remains robust with Q3 2024 reaching $63.7 billion, representing a 30% YoY increase. The company maintains healthy margins despite some fluctuations:
- Gross margin: 9.68% in Q3 2024
- ROE: 6.92% showing solid returns
- Net margin: 1.30% reflecting competitive industry pressures
Recent Developments
The company recently ended speculation about the Humana acquisition, focusing instead on share repurchases with $5.7 billion bought back in the first ten months of 2024. This demonstrates management's confidence in the company's intrinsic value.
Analyst Sentiment
Recent analyst actions show mixed but generally positive outlook:
- Truist Securities adjusted target to $390 (Jan 2025)
- Barclays maintains $420 target
- Multiple firms maintain "Buy" ratings with price targets ranging from $377-$420
Given the strong revenue growth, reasonable valuation metrics outside P/E, and positive analyst sentiment, CI appears fairly valued at current levels, though not significantly overvalued when considering its market position and growth trajectory.
