|Bid||165.50 x 1000|
|Ask||177.99 x 1200|
|Day's Range||173.48 - 177.60|
|52 Week Range||141.95 - 226.61|
|Beta (3Y Monthly)||0.99|
|PE Ratio (TTM)||16.01|
|Earnings Date||Aug 1, 2019|
|Forward Dividend & Yield||0.04 (0.02%)|
|1y Target Est||213.45|
The Energy and Commerce Committee in the U.S. House of Representatives advanced several health care initiatives Wednesday, the most significant of which could curb surprise medical bills.
The Treasury Department and IRS issued a notice Wednesday that will help high deductible plan enrollees qualify for more preventative care benefits, which expands the uses for Health Savings Accounts.
Global health service company Cigna and its Express Scripts business were both named as a Best Place to Work for Disability Inclusion after earning scores of 100 on the 2019 Disability Equality Index® (DEI). The index is a joint initiative of the American Association of People with Disabilities (AAPD) and Disability:IN, and measures inclusion across six categories: culture and leadership, enterprise-wide access, employment practices, community engagement, supplier diversity and non-U.S. operations. As part of the company’s commitment to diversity and inclusion, Cigna and Express Scripts have active employee groups, People With Different Abilities (PWDA) and ExpressPossAbilities (ExPA).
St. Louis companies continue to be buyers in the mergers and acquisitions market. Of 98 transactions in the first half of 2019, 61 were acquisitions by St. Louis companies, and 37 were sales by St. Louis companies, according to The Fortune Group, an M&A advisory firm. It’s a trend that goes back 10 years and is in contrast to the negative trend – and image – of large public companies headquartered in St. Louis relocating or selling to companies with headquarters elsewhere.
Congress will be voting Wednesday on a repeal of what is known as the “Cadillac Tax”—a provision of the Affordable Care Act which would place a 40% tax on employer-sponsored health care plans which provide excess benefits.
The pharmacy benefit management company is now a wholly-owned subsidiary of Cigna, but it is a major earner: in 2017, Express Scripts brought in more than $100 billion in revenues.
Following the news on July 11 that the Trump administration dropped their proposal to eliminate rebates for drug manufacturers and pharmacy benefit managers (PBM), Cigna Corp (CI) surged 9%. The company’s profits would have taken a major hit had the ban gone into effect. While the stock is down 6% year-to-date, analysts believe a rebound is coming. With its August 1 earnings release date quickly approaching, we enlisted the help of TipRanks to find out if Cigna really is on the road to recovery. Cigna Relies on PBM SegmentCigna is a health insurance company based in Philadelphia, Pennsylvania offering a wide variety of medical, supplemental, dental and Medicare plans. The proposed rule would have prevented drug makers from giving discounts and rebates to insurers or PBMs for putting a particular drug on a list of drugs covered by health plans. PBMs were first used to help insurance companies manage prescription claims for patients with Medicare Part D plans. Now they are responsible for drug utilization review, formulary management, determining which pharmacies are in network as well as reimbursements given to pharmacies. Had the President been able to ban drug rebates, the effects would have been catastrophic for insurance providers. Cigna along with several others shifted focus towards making PBMs a key component of their business models. The company recently increased their exposure to the PBM sector after acquiring Express Scripts for $67 billion in December. The goal of the acquisition was to lower costs and improve the quality of treatments by providing access medical care and pharmacy benefits in one single place. Even with the decline caused by the threat of rebate cuts, sentiment regarding the company and its ability to make a comeback is positive. News Sentiment on CI A Strong Q1 The company had a strong first quarter, with total revenue reaching $38 billion up from $11 billion in Q1 2018. Shareholder net income grew to $1.4 billion from $0.9 billion over the same time period. EPS increased to $3.90 per share, surpassing the Street’s prediction of $3.73 per share. Cigna also exceeded the $33.1 billion estimate for adjusted revenue, with the actual result being $33.4 billion. Management attributed this growth to the Express Scripts acquisition as well as its health coverage plans for medium and large-sized companies. President and CEO, David Cordani said, “Cigna's first quarter performance reflects focused execution of our proven growth strategy and positions us well to achieve our increased outlook for 2019.” Going Forward Into Q2Ahead of the Q2 earnings release, management is confident more gains are on the way. The company updated its guidance on May 2, saying 2019 adjusted revenue should fall within the range of $133 billion to $135 billion. This is up from the original estimate of $132 billion to $134 billion. Five-star analyst, Steven Halper, believes that the acquisition wasn’t fully appreciated by investors. “We view the merger with ESRX favorably as the combined company could generate significant synergies and free cash flow. We continue to believe that CI’s risk/ reward tradeoff is highly compelling. $245 price target is supported by our DCF analysis,” he said on May 2 when explaining his decision to reiterate his Buy rating and $245 price target. Charles Rhyee, a Cowen & Co. analyst, believes that despite a decline in Q1 2019 Health Services adjusted operating profit amounting to 12% year-over-year, investors should not be concerned. “On the face of it, this decrease would suggest something is wrong, but we don't believe that's necessarily the case. We believe one factor driving this could be investment spending to realize cost synergies that are not broken out separately as one-time items,” he said. On May 7, the analyst reiterated his Buy rating on the stock despite lowering the price target from $264 to $254. The Bottom Line Wall Street is bullish on Cigna. The stock has a ‘Strong Buy’ analyst consensus, with 10 out of 10 analysts giving the stock a buy rating over the last three months. The average price target is $221, suggesting upside potential of 23%. Analyst Ratings & Price Targets on CI
DEEP DIVE Despite all the good economic news, earnings growth is expected to slow to a crawl this year for large U.S. companies. It may also surprise you that the health-care sector is seen as one of the exceptions.
We study the impact of Trump's dropping of the proposed drug rebate rule on some health ETFs with exposure to pharmacy benefit managers and healthcare insurers.
Investors' skepticism runs rife as Trump drops the drug rebate proposal, pushing drugmakers to take center stage with regard to the controversial drug pricing issue.
Ruud Dobber, AstraZeneca’s biopharmaceuticals president, weighs in on the Trump administration walking back one change it had been seeking in the drug space.
The stock market hit highs this week as Fed chief Jerome Powell signaled a July 31 Fed rate cut. Cisco will buy Acacia, Delta earnings beat, Cigna soared on a drug rebate rule reversal.
After many regulatory disturbances and overhang of the drug rebate ban proposal, a repeal of it is a breather for health insurers.
On Thursday, the Trump administration announced the withdrawal of the proposal to abolish rebates paid to pharmacy benefit managers by drugmakers.
The Trump administration announced Thursday that it's deciding to withdraw its proposal to eliminate rebates from government drug plans.
The drug companies provide rebates to PBMs in exchange for distributing their products.
Nasdaq closed 6 points lower, even as Federal Reserve Chairman Jerome Powell reinforced expectations for an interest rate cut later this month.
The Trump administration dropped a drug rebate rule to squeeze profits of pharmacy benefit managers. Cigna, CVS, United Health and others soared. Some drugmakers rallied.