Shares of Cigna Corp. CI, -3.61% sank 3.9% in midday trading Friday, after BofA Securities analyst Kevin Fischbeck reversed his stance on the health services company to bearish from bullish, citing the lack of clarity on the trajectory of earnings over the next couple of years. Fischbeck double downgraded Cigna to underperform from buy, and cut his stock price target to $225 from $240. He said that although Cigna has now integrated Express Scripts successfully (the acquisition closed in December 2018), reduced debt and sold off underperforming units, the growth outlook from here is less clear. “[Cigna’s] business mix has the slowest end-market growth of any MCO [managed-care organization] we cover, dominated by commercial and PBM [pharmacy benefit manager] services and therefore requires consistent share gains to match peer growth,” Fischbeck wrote in a note to clients. He also said that Cigna’s third-quarter guidance appears “especially at risk” given concerns over MCO medical loss ratios. Cigna’s stock has lost 1.2% year to date, while the SPDR Health Care Select Sector ETF XLV, -0.61% has climbed 18.4% and the S&P 500 SPX, -0.22% has advanced 19.7%.
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