S&P Equity Research Upgrades Shares of CIGNA to 'Buy' (4-STARS) from 'Hold' (3-STARS)

NEW YORK, Aug. 2  /PRNewswire/ -- S&P Equity Research Services has upgraded its opinion on shares of CIGNA Corp. (NYSE: CI; $103) to "Buy" (4-STARS out of 5) from "Hold" (3-STARS).  Second-quarter operating earnings per share of $2.17 vs. $1.72, before reserve development, was $0.22 above our estimate.  We calculate that share buybacks accounted for $0.23 of EPS growth.  Still, we are encouraged by the health care unit's earnings rise, enrollment retention, market expansion opportunities, and progress in the national accounts market for the 2007 selling season despite competition.  We view positively the company's pricing discipline and medical and SG&A cost control.  We have raised our 2006 EPS estimate by $0.25 to $8.75, our P/E-to-growth estimate to an above-peer 1.15X from 1.0X, and raised our target price by $19 to $121.

Risks to our recommendation and target price include intensified competition, higher-than-expected growth of medical costs, adverse regulatory changes, and a weakened economy.

  Phillip Seligman
  Managed Health Care Equity Analyst
  Standard & Poor's Equity Research Services



The analyst quoted above is a Standard & Poor's Equity Analyst.  He has no affiliation with any company he covers.  He has no ownership interest in any company he covers.  Standard & Poor's other affiliates may provide services to the companies that are the subject of this report.

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