Group 1 - Artisan Partners reported that the equity market rally continued in Q3 2025, driven by strong corporate earnings, rising AI investment, and favorable US fiscal policy, resulting in fund returns of 0.83%, 0.91%, and 0.90% for its Investor Class, Advisor Class, and Institutional Class, respectively, compared to a 5.33% return for the Russell 1000 Value Index [1] - The Cigna Group (NYSE:CI) had a one-month return of 0.70% and a 52-week loss of 0.05%, with a market capitalization of $73.73 billion as of December 29, 2025 [2] - Artisan Value Fund swapped The Cigna Group for Elevance, noting that while both companies are health insurers, Elevance has a more diversified business mix and is less exposed to potential risks from pharmacy benefits management (PBM) reform compared to Cigna [3] Group 2 - The Cigna Group was held by 78 hedge fund portfolios at the end of Q3 2025, a slight decrease from 80 in the previous quarter, indicating a decline in popularity among hedge funds [4] - Despite recognizing The Cigna Group's investment potential, Artisan Partners believes that certain AI stocks present greater upside potential and lower downside risk [4]

Group 1 - The primary goal of the "High Income DIY Portfolios" service is to provide high income with low risk and capital preservation for DIY investors [1] - The service offers seven portfolios designed for income investors, including retirees, featuring three buy-and-hold portfolios, three rotational portfolios, and a conservative NPP strategy portfolio [1] - The portfolios aim to create stable, long-term passive income with sustainable yields, including two high-income portfolios and two dividend growth investment (DGI) portfolios [1] Group 2 - The "Financially Free Investor" focuses on investing in dividend-growing stocks with a long-term horizon and employs a unique 3-basket investment approach [2] - This approach aims for 30% lower drawdowns, 6% current income, and market-beating growth over the long term [2] - The service includes a total of 10 model portfolios with varying income targets, buy and sell alerts, and live chat for portfolio management and asset allocation [2]

Summary of Healthcare Services Conference Call Industry Overview - The conference call focused on the **Healthcare Services** industry, particularly the **Managed Care** sector and its outlook for 2026, highlighting potential margin improvements and policy clarity as positive factors for growth [4][10][11]. Key Points and Arguments Managed Care - **Earnings Recovery**: Most Managed Care Organizations (MCOs) are expected to reach trough earnings in 2026, with potential upward revisions thereafter. Medicare Advantage (MA) is anticipated to drive margin upside, while skepticism remains around Medicaid and ACA Exchanges until MCOs demonstrate margin improvements [5][12]. - **Enrollment Trends**: MCOs are targeting enrollment declines to improve margins, with companies like CVS, ELV, and UNH focusing on this strategy. Conversely, HUM is positioned for membership growth [12][52]. - **Regulatory Environment**: The 2026 midterms are expected to create gridlock, reducing the likelihood of major policy changes outside of CMS rulemaking, which could stabilize the operating environment for MCOs [5][12]. Pharmaceutical Distributors - **Strong Fundamentals**: The current strength in results for pharmaceutical distributors is attributed to stable generic pricing, MSO growth, and a robust specialty pipeline. Companies like McKesson (MCK) and Cencora (COR) are favored due to their strong specialty businesses [9][16]. - **M&A Activity**: Distributors led M&A activity in 2025, with expectations for continued integration and organic investment in MSO capabilities in 2026 [25]. Labs and Healthcare Facilities - **Demand Trends**: Labs are expected to see steady demand trends with a healthy backdrop in diagnostics. Regulatory uncertainties may impact pricing and mix development, but overall operating conditions are stable [9][12]. - **Facility Performance**: Healthcare facilities are positioned to benefit from favorable utilization trends, although policy uncertainty remains a concern for future earnings growth [12][16]. Additional Insights - **Investment Picks**: Top investment picks include UnitedHealth (UNH) and CVS Health (CVS) for their cleaner stories, while Cigna (CI) is seen as attractive but with more complexities [5][14][17]. - **Margin Pressures**: Medicaid remains a challenge, with companies like ELV and UNH guiding for margin pressure in 2026. Investment income is also expected to be a headwind for managed care [5][12]. - **Market Dynamics**: The ACA Exchanges are viewed as a swing factor for MCOs, with a wide range of outcomes expected due to potential shifts in market morbidity [12][43]. Conclusion The healthcare services industry is navigating a complex landscape with potential for margin recovery and growth driven by Medicare Advantage, while facing challenges in Medicaid and ACA Exchanges. The focus on regulatory clarity and strategic M&A activity will be crucial for companies as they prepare for 2026 and beyond.

Group 1 - President Trump plans to convene major health insurance companies to pressure them into lowering healthcare costs for Americans facing premium increases after the expiration of ObamaCare subsidies [1][2] - The meeting is expected to take place in the coming weeks, with Trump emphasizing the need for insurance companies to reduce their profits significantly [2][3] - The health insurance industry, represented by AHIP, stated that premiums reflect healthcare costs and that insurance companies are doing their best to protect Americans from rising medical expenses [2][3] Group 2 - Over 20 million Americans are projected to see their healthcare premiums double by 2026, which could strain middle and low-income voters already concerned about living costs [3] - The Democratic Party is focusing on the rising premiums as a key issue for voters, especially in light of the upcoming midterm elections [3] - Trump's public pressure on insurance companies may create uncertainty regarding future profit margins and rates, negatively impacting the valuation of the health insurance sector in the short term [3] Group 3 - Trump announced agreements with nine pharmaceutical companies to lower drug prices for low-income and disabled individuals, claiming it as a significant victory for patients [4] - The agreements include commitments to sell discounted drugs directly to consumers and to launch new drugs in the U.S. at prices comparable to those in overseas markets [4] - Trump expressed optimism that these measures would lead to a rapid decrease in drug prices, potentially making them the lowest among developed countries [4]

Core Insights - President Trump announced a set of drug-pricing agreements with nine major pharmaceutical companies, aiming to align U.S. medicine costs with those in Europe [1][2] - The initiative includes a new direct-to-consumer portal, TrumpRx.gov, allowing patients to purchase certain medicines directly from manufacturers [2][4] Group 1: Agreements and Participants - The agreements involve 14 out of 17 drugmakers that Trump previously urged to lower prices, including Amgen, GSK, and Merck [2][3] - Drug companies are motivated to negotiate to avoid potential regulatory measures that could impact their profits [3] Group 2: TrumpRx.gov Functionality - TrumpRx.gov will serve as a central directory for patients to access selected medicines directly from manufacturers' websites [4] - The portal is expected to be fully operational by January, following a promotional launch [4] Group 3: Pricing Details - Highlighted medicines include Amgen's Repatha at $239/month, GSK's Advair Diskus at $89/month, and Merck's Januvia at $100/month [6] - Gilead's Epclusa will be priced at $2,492/month, despite lower costs for insured patients [6] Group 4: Impact on Medicaid and Medicare - Companies committed to launching new medicines in the U.S. at prices comparable to those in other wealthy countries [8] - Medicaid programs are legally entitled to the lowest drug prices, with Bristol Myers Squibb offering Eliquis free to Medicaid [9] Group 5: Industry Response and Future Outlook - Health policy experts express skepticism about the agreements' impact on overall drug prices for most Americans [10] - The agreements do not impose mandatory price controls and leave many brand-name drug costs unchanged [15] - Ongoing discussions with additional manufacturers like AbbVie and Johnson & Johnson may lead to further agreements [14]

Core Viewpoint - The stock prices of major U.S. health insurance companies declined following President Trump's announcement that he would meet with insurance companies in the coming weeks to negotiate lower prices [1][2]. Group 1: Market Reaction - Major health insurance stocks, including Humana (HUM), UnitedHealthcare (UNH), Cigna (CI), CVS Health (CVS), and Elevance Health (ELV), either retraced gains or fell further after Trump's comments [1][2]. - The decline in stock prices occurred after a news event where Trump announced pricing agreements with nine pharmaceutical companies [1][2]. Group 2: Trump's Statements - Trump indicated that he would convene large, wealthy insurance companies to persuade them to lower prices [3]. - He expressed optimism that a single discussion could lead to price reductions of 50%, 60%, or even 70%, suggesting that these companies have been highly profitable [4].

Core Insights - BofA Securities highlights rising cost pressures and uncertainty in earnings estimates for managed care organizations, indicating that Medicare presents greater risks compared to Medicaid, and reported EPS may not accurately reflect true earnings potential [1] Group 1: Cigna Group - Cigna Group (NYSE:CI) is noted for providing clean exposure to commercial health insurance, which is the only segment performing consistently well, alongside a scaled pharmaceutical platform [2] - Through its pharmacy benefit manager and specialty pharmacy businesses, Cigna is well-positioned to benefit from increasing drug spending, including obesity therapies and gene therapies, without relying on specific products [3] - Cigna is expected to achieve 10%–15% annual EPS growth post-2026, as the Pharmacy Benefits Manager model resets [3] Group 2: Valuation and Market Position - Cigna's stock trades at approximately a 12% free cash flow yield and has significantly less government exposure than peers, supporting a similar 10%–15% return profile [4] - The valuation at 8.1x 2027 earnings appears compressed relative to de-risked estimates, with potential for a re-rating towards a historical multiple of 10x–12x [5] - BofA is also optimistic about Alignment Healthcare, Inc. (NASDAQ:ALHC), expecting over 20% member growth due to favorable conditions from Stars in 2026 [5] Group 3: UnitedHealth Group - UnitedHealth Group Inc (NYSE:UNH) is viewed as well-positioned for the coming years, contingent on a supportive Medicare Advantage rate environment [6] - The firm is awaiting the 2027 Medicare Advantage rate proposal to evaluate potential coding changes that could impact margins [6] - If regulatory stability is indicated, UNH could significantly expand margins in 2027 as a $6 billion headwind is expected to roll off [7] Group 4: Medicaid and Market Dynamics - Ongoing declines in Medicaid enrollment are reshaping the risk pool, complicating rate setting for states and limiting margin expansion for Medicaid-focused insurers like Centene Inc. (NYSE:CNC) and Molina Healthcare Inc. (NYSE:MOH) [7] - Accurately pricing exchange risk for 2026 remains uncertain due to shifting membership trends, leading to a lack of market reward for execution until at least the second quarter of 2026 [8]

Group 1 - The Cigna Group (NYSE:CI) is considered a cheap healthcare stock with a potential upside of 25.5%, as TD Cowen reaffirmed a 'Buy' rating and set a price target of $333 [1][2] - The company's earnings per share (EPS) for 2026 is projected to be within a specific range, and the stock is trading at a decade-low valuation, indicating it is "largely de-risked" [2] - Cigna's new rebate-free pharmacy benefit management (PBM) model is seen as a significant step towards broader PBM reforms, which could enhance valuation and address regulatory issues [2] Group 2 - Guggenheim also maintains a 'Buy' rating on The Cigna Group, raising its price target to $318 from $309, reflecting a 20% upside potential [4] - Cigna operates primarily through its Evernorth Health Services and Cigna Healthcare segments, providing insurance and related products and services [4]

Core Insights - The Cigna Group Foundation announced a new round of funding to support community-driven efforts aimed at improving housing stability for veterans, with a total commitment of $9 million over three years [1][5]. Group 1: Funding and Support - The latest funding round will support 24 local nonprofit organizations focused on helping veterans achieve stability in their living conditions, both physically and emotionally [1]. - The funding will specifically assist in repairing and adapting homes, as well as providing mortgage and rental assistance to veterans [1][6]. Group 2: Community Initiatives - Employees of The Cigna Group have actively participated in volunteer efforts, such as constructing tiny homes for veterans, which will accommodate 50 veterans and their families [2][3][4]. - The Veterans Community Project, a recipient of the 2024 grant, will include amenities like an outreach center, green spaces, and security features [2][3][4]. Group 3: Targeted Areas of Assistance - The Foundation's focus includes providing legal services and case management to help veterans navigate public benefits, alongside home repairs and adaptations for severely wounded and disabled veterans [6]. - The grantee organizations are located in various states, including Arizona, Connecticut, Florida, Georgia, Illinois, Missouri, New Jersey, Pennsylvania, Tennessee, and Texas, addressing specific needs in those regions [6]. Group 4: Veteran Housing Crisis - Nationwide, approximately 40,000 veterans experience homelessness on any given night, with about 1.5 million at risk of homelessness, highlighting the urgent need for support [7]. - Veterans facing housing instability are at a higher risk for mental distress and suicidal ideation, underscoring the importance of the Foundation's initiatives [7].

Core Insights - The Cigna Group is recognized as one of the 14 Best US Stocks to Buy for the Long Term [1] - Guggenheim has raised its price target for Cigna to $318 from $309 while maintaining a Buy rating [2] - Cigna reported a 10% year-over-year revenue growth, reaching $69.7 billion in Q3 2025, exceeding analysts' estimates by $3 billion [3] Revenue Growth - The Evernorth Health Services segment, which includes Pharmacy Benefit Services and Specialty and Care Services, was the primary driver of revenue growth [4] - Adjusted revenue from this segment grew by 15%, while adjusted income from operations increased by 1% [4] Strategic Initiatives - Cigna introduced a new pharmacy benefit model aimed at addressing significant challenges in the healthcare industry, focusing on cost reductions and increased transparency [3]