9× forward earnings — but management itself guided the PBM down for 2026.

• The cheap multiple is real. $282 prints 9.3× the FY26 adjusted EPS guide of $30.35, with a 10.7% trailing FCF yield — versus Elevance at 14× and UnitedHealth at 28×. Cigna also runs the lowest medical care ratio in managed care at 84.4% in FY25, 470bps below the next-best peer.
• Management has guided the PBM down. The FY26 Evernorth adjusted operating income floor of $6.9B sits below the FY25 print of $7.2B. Q1 FY26 Pharmacy Benefit Services adjusted earnings already fell 28% year-on-year as the rebate-free Signature transition loaded in.
• Federal law dates the reset. The Consolidated Appropriations Act of 2026 mandates 100% ERISA rebate pass-through from August 2028 and bans list-price-linked Part D PBM compensation from January 2028 — the take-rate that funded the buyback engine is being legislated away.

85% of revenue is a low-margin PBM; 38% of profit is the smaller commercial insurer.

Evernorth (PBM + Specialty + Care): $235B adjusted revenue at 3.1% pre-tax margin. Express Scripts processed 2.22B adjusted Rx claims in 2025 (+5% YoY), inside a three-firm PBM triopoly that handles roughly 80% of US prescription volume. Specialty pharmacy via Accredo grew 14% to $103B.

Cigna Healthcare: $47B adjusted revenue at 8.8% pre-tax margin — the inverse profile. 79% of medical customers are self-funded ASO accounts that put no claim risk on the balance sheet. Sold Medicare Advantage to HCSC in March 2025 for $4.9B, announced an ACA individual-exchange exit by end-2026.

Why this matters: A consolidated P/E averages two unlike businesses. On a clean sum-of-parts the PBM trades like a logistics-and-services book (8–10× EBIT) and the insurer like managed care (10–12× EBIT); today's $74B market cap sits at the midpoint of a $67B–$87B equity range.

Lowest medical care ratio in the peer set — and Q1 just printed 79.8%.

The peer set ran 89–94% in FY25; Cigna's 84.4% is mix, not magic — commercial-tilted, ASO-heavy, no Medicare Advantage after March 2025, and an ACA exit closing end-2026. Each divestiture trades a higher-MCR demographic for a cleaner number, but also for a smaller addressable market. The Q2 and Q3 FY26 prints test whether the gap holds — the Q4 FY24 stop-loss miss is still in living memory.

One PBM client now drives 19% of group revenue — and that client's P&L is broken.

• Concentration is rising, not stable. A single Evernorth pharmacy benefit client — the multi-year Centene contract that began January 2024 — drove approximately 19% of FY25 revenue from external customers, up from 16% in FY24. Volume is still consolidating in, not in steady state.
• The counterparty is stressed. Centene printed a $7.6B operating loss in FY25 at a -3.9% EBIT margin (a $6.7B net loss) and runs AcariaHealth as an in-house specialty pharmacy — a credible carve-out option that does not require waiting for the 2029–2030 contract cliff.
• The loss math is severe. A full contract loss moves group revenue by roughly $50B and discounts the Evernorth bucket by 25–30%. A 200–300bps take-rate concession at a mid-contract repricing trims 5–10% of Evernorth EV. This is the largest discrete operating risk in US managed care.

GAAP swings violently while adjusted income glides — and the rebate accounting now lives under racketeering litigation.

• Ascent class action. Bernstein Litowitz filed a RICO complaint on February 17, 2026 alleging Express Scripts diverted billions in drug-manufacturer rebates to a Swiss group-purchasing affiliate, Ascent Health Services — which the FTC has now forced Cigna to redomicile to the US. Motion-to-dismiss ruling expected H2 FY26.
• The smooth/jagged earnings split. Adjusted operating income grew 4%/4% in FY24 and FY25 while GAAP shareholders' net income moved −23%/−34%/+73% across FY23–FY25. The non-GAAP gap hit 125% of GAAP in FY24. 50% of CEO bonus is tied to the smoothed metric; PwC has audited Cigna for 43 years.
• AR factoring is the cash-flow swing factor. Cigna runs an undisclosed-size accounts-receivable factoring facility cited as a 2023 CFO tailwind and a 2025 CFO drag — a $1B+ year-over-year swing whose size, discount rate, and year-end balance are not separately disclosed in filings.