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Cigna Corporation CI is well poised to grow on the back of higher membership and strategic acquisitions. Its diversified business, superior operating performance and the provision of quality products and services bode well.
Cigna, with a market cap of $83.2 billion, is a healthcare plan provider in the United States with a wide range of products. Its operations include coordinated and point solution health services. CI provides pharmacy services, benefits management, care solutions as well as data and analytics. These services are used by health plans, employers, health care providers and government organizations.
Courtesy of solid prospects, this presently Zacks Rank #2 (Buy) stock is worth adding to your portfolio at the moment.
The Zacks Consensus Estimate for Cigna’s 2022 earnings is pegged at $22.66 per share, indicating a 10.7% rise from the year-ago reported figure. The stock has witnessed five upward estimate revisions in the past 30 days against one in the opposite direction. Earnings beat estimates in each of the last four quarters, the average being 8.6%.
Cigna Corporation Price and EPS Surprise
Cigna Corporation price-eps-surprise | Cigna Corporation Quote
The consensus estimate for 2022 revenues stands at $177.8 billion, suggesting a 2.1% rise from the prior-year reported number.
Cigna currently has a top Zacks Rank and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cigna continues to drive a strong market and product expansion, which is aiding its membership growth. CI ended the first quarter of 2022 with 17.8 million medical members, up 6.6% year over year. Further, management expects 2022 medical customers to grow by a minimum of 725,000, indicating an upside from the prior projection of “atleast 575,000” growth.
CI’s Evernorth business is expected to deliver adjusted earnings of $6.1 billion in 2022, suggesting an upside of 5% from 2021. Also, CI focuses on strategic buyouts to boost inorganic growth. Its acquisitions enable product expansion and diversification. This aided international operations, which have been increasing revenues over the years. Cigna’s revenues are increasing consistently, seeing an 11-year adjusted CAGR of 15%.
Cigna has a strong shareholder value boosting program in place. In February this year, CI hiked its dividend by 12%. During 2022, CI anticipates deploying capital to the tune of $12 billion. It plans to undertake share buybacks of more than $7 billion. Also, CI remains optimistic about paying an attractive dividend and generating a cumulative operating cash flow of $50 billion through 2025.
The players in the healthcare plans market are expected to witness tremendous business growth this year. With the falling unemployment rate, the number of coverages bought by employers for their workers are rising and the trend will likely continue. This bullish outlook bodes well for companies like Cigna.
However, a few factors can affect the stock’s growth. Its high leverage ratio and increasing operating expenses are concerning. Nevertheless, we believe that a systematic and strategic action plan will drive CI’s long-term growth.
Other Key Picks
Some other top-ranked stocks in the medical space are Select Medical Holdings Corporation SEM, Omega Therapeutics, Inc. OMGA and Progyny, Inc. PGNY, each carrying a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Select Medical’s earnings is currently pegged at $2.19 per share. SEM has witnessed one upward estimate revision in the past 60 days against none in the opposite direction.
Select Medical’s earnings beat estimates in each of the last four quarters, the average being 42%.
The Zacks Consensus Estimate for Omega Therapeutics’ earnings indicates a 28.9% increase from the prior-year reported number. OMGA has witnessed three upward estimate revisions and no downward movement in the past 60 days.
Omega Therapeutics’ earnings beat estimates twice in the last four quarters and missed the mark on the remaining two occasions.
The consensus estimate for Progyny’s 2022 bottom line has improved 4.5 times in the past 60 days. PGNY has witnessed three upward estimate revisions during this time frame against none in the opposite direction.
Progyny’s earnings beat estimates in each of the last four quarters, the average being 169.7%.
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Cigna Corporation (CI) : Free Stock Analysis Report
Select Medical Holdings Corporation (SEM) : Free Stock Analysis Report
Progyny, Inc. (PGNY) : Free Stock Analysis Report
Omega Therapeutics, Inc. (OMGA) : Free Stock Analysis Report
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