By Hidden Values Daily 
The specialty and care services business is expected to grow income towards the higher end of its long-term growth target, offset by a decline in pharmacy benefit services.
Goldman Sachs on Tuesday reduced EPS estimates and lowered price forecast from $370 to $330, while maintaining its Buy rating.
While investors have long applied a significant discount to Cigna’s forward P/E multiple to anticipate future pressure on pharmacy benefit manager (PBM) margins, the market did not expect that “the PBM margin reset” would arrive with the 3Q25 earnings call.
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Analyst Scott Fidel says they were just as surprised as the market by Cigna’s PBM lowered guidance. Goldman Sachs did not anticipate a material decline in 2026 PBM segment earnings on company-sanctioned pricing changes.
Cigna expects margin pressure in 2026 and 2027 as it rolls out its new rebate-free PBM pricing model and renews long-term contracts at lower margins with its three largest PBM clients — Prime Therapeutics, the Department of Defense, and Centene Inc. (NYSE:CNC).
Together, these clients generate about $90 billion in annual revenue, representing roughly 40% of Evernorth’s 2025E revenue and 30% of Cigna’s total adjusted revenue forecast.
While Cigna maintained its long-term Evernorth margin target of 3.5%–4.5%, Goldman Sachs expects results to remain toward the lower end of that range, constrained by the lower-margin structure of these large contracts through at least the decade’s end.
Cigna views the trade-off as strategic—accepting slimmer margins to preserve roughly $90 billion in pharmacy volume and pricing leverage as it transitions other clients to its new PBM pricing model.
JP Morgan maintains a Cigna Overweight rating, lowering the price forecast from $428 to $375.
Barclays maintains Cigna with an Overweight and lowers the price target from $383 to $300.
Price Action: CI stock is up 0.40% at $259.65 at the last check on Tuesday.