The Cigna Group (CI): A Bull Case Theory

We came across a bullish thesis on The Cigna Group on Investing With Purpose’s Substack. In this article, we will summarize the bulls’ thesis on CI. The Cigna Group's share was trading at $293.76 as of September 18th. CI’s trailing and forward P/E were 16.26 and 9.13 respectively according to Yahoo Finance.

Cigna (NYSE: CI) has seen its share price decline nearly 12% from June highs, entering oversold territory ahead of July 31 earnings, creating a tactical “buy-the-dip” setup. The company retains strong fundamentals, including mid-single-digit revenue and EPS growth, industry-leading margins, and robust free cash flow supported by modest leverage. Net margin of ~4.5% outpaces the managed-care average, reflecting disciplined cost control and the strength of its pharmacy benefit management, while free cash flow remains resilient due to a modest capex profile.

Valuation at ~15× forward EPS places the stock slightly below peers despite Cigna’s higher ROE and superior cash conversion, offering a small discount for a fundamentally attractive business. Risks include regulatory changes, drug-cost inflation, and integration issues from M&A, though catalysts such as stronger earnings, margin expansion, ESG progress in value-based care, and further deleveraging could unlock upside.

Technically, the stock trades below major moving averages and the Ichimoku cloud, signaling a bearish bias, while momentum indicators like RSI and StochRSI suggest near-term relief potential. Key support lies around $285–280, with protective stops near $270. Resistance is mapped at $305–312, and a sustained recovery above the 100- and 200-day SMAs could pave the way for a medium-term base in the $320–340 range.

A disciplined trade plan involves scaling into weakness, targeting a relief bounce followed by longer-term upside contingent on stable fundamentals. Overall, Cigna presents a compelling buy-on-weakness opportunity, with valuation, cash flow strength, and upcoming earnings acting as pivotal drivers for a rerating.

Previously we covered a bullish thesis on The Cigna Group (CI) by Antonio Linares in May 2025, which highlighted its PBM dynamics, GLP-1 pricing concessions, and structural moat. The company’s stock price has depreciated approximately by 6.05% since our coverage. This is because the thesis didn’t play out as expected in the near term. The thesis still stands as Cigna remains undervalued with resilient fundamentals. Investing With Purpose shares a similar view but emphasizes a tactical “buy-the-dip” setup.

The Cigna Group is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 80 hedge fund portfolios held CI at the end of the second quarter which was 74 in the previous quarter. While we acknowledge the potential of CI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.