** Analysts at Citi raise PT for Sigma Healthcare to A$2.50 from A$1.40; maintain "Neutral" rating

** Wholesale pharmaceuticals distributor SIG received on Thursday Australian competition watchdog's approval for an A$8.8 bln ($5.87 bln) merger with private firm Chemist Warehouse

** Brokerage says the upgraded PT reflects Chemist Warehouse's potential in the combined Sigma Chemist Warehouse Group

** Brokerage expects the combined group to generate EBIT of ~A$800 mln in FY26, its first full year

** "The combined group should continue to perform well in the prevailing high cost of living environment" - Citi

** "The network continues to grow in Australia and there are prospects for further international expansion" - Citi

** Stock has more than doubled in value this year, as of last close

($1 = 1.4997 Australian dollars)

(Reporting by Sherin Sunny in Bengaluru)

((Sherin.Sunny@thomsonreuters.com))