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Time to Buy Cigna or Regeneron Stock Before Earnings?

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Big tech companies will highlight this week’s earnings, but there are quite a few large-cap companies from a variety of sectors that investors will want to pay attention to as well.

Among the Finance and Medical sector, Cigna (CI - Free Report) and Regeneron Pharmaceuticals (REGN - Free Report) are both leaders in their respective industries and have had strong performances over the last year as the broader market and economy declined.

Let’s take a look at the insurance and healthcare giant going into their quarterly reports on Friday, February 3.

Brief Overview

Both Cigna and Regeneron Pharmaceuticals offer valuable exposure to the broader healthcare industry which is an area of the economy many analysts still view as a space for investors to “hideout” in terms of defensive protection in the current market environment.

As an insurance company, Cigna is part of the Finance sector but its coverage and business primarily revolve around healthcare services. Evernorth, Cigna’s largest segment, includes a broad range of coordinated and point solution health services that include pharmacy services, benefits management, care solutions, and data analytics provided to health plans, employers, government organizations, and healthcare providers.

Cigna’s other primary segment, Cigna Healthcare, comprises Cigna’s U.S. Commercial, U.S. Government, and International Health businesses that provide comprehensive medical and coordinated solutions to clients and customers.

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As for Regeneron, it offers investors unique exposure to biomedicine with the company focused on the discovery, development, and commercialization of treatments targeting serious medical conditions. Regeneron’s portfolio includes nine marketed drugs that treat serious eye diseases, asthma, arthritis, and lung cancer, among other diseases and health conditions.

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Cigna Quarterly Estimates

Cigna’s fourth-quarter earnings are expected at $4.84 per share, which would be up 1% from Q4 2021. Sales are forecasted to be virtually flat year over year for Q4 at $45.58 billion. This would round out Cigna’s fiscal 2022 with earnings up 13% at $23.14 per share and total sales rising 3% to $180.34 billion.

Plus, FY23 earnings are projected to rise another 7% to $24.81 per share with sales expected to jump another 5%. Even better, FY23 sales projections of $189.41 billion would represent 289% growth over the last five years with 2018 sales at $48.65 billion.

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Regeneron Quarterly Estimates

Pivoting to Regeneron, Q4 earnings are projected at $9.68 per share, a -59% decline from Q4 2021 EPS of $23.72 a share after an outstanding prior-year quarter. Fourth quarter sales are expected to be down -36% year over year to $3.17 billion

Regeneron would round out fiscal 2022 with EPS at $42.50 compared to its mind-boggling earnings of $74.66 a share in 2021. Fiscal 2023 earnings are projected to dip another -3%. Total sales for fiscal 2022 would be down - 26% at $11.84 billion but are expected to rise 4% in FY23.

More impressive, fiscal 2023 sales projections of $12.34 billion would still be an 84% increase over the last five years with 2018 sales at $6.71 billion.

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Performance & Valuation

Both Cigna and Regeneron stocks have indeed been valuable investments in terms of defensive safety acting as a hedge against inflation. Over the last year, Cigna stock is up +36% Vs. Regeneron’s +21% as both largely outperformed the S&P 500’s -14% with the Nasdaq down -19%.

Furthermore, in the last decade, Cigna’s +405% and Regeneron’s +354% have also topped the performance of the broader indexes.

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Trading around $313 per share and just 12.7X forward earnings, Cigna stock continues to stand out from a valuation standpoint. Shares of Cigna trade 37% beneath its decade-long high of 20.3X and are on par with the median of 12.4X.

At around $758 a share and 20.6X forward earnings, Regeneron stock also trades attractively relative to its past. Shares of Regeneron trade 76% below its decade-long high of 86.4X and at a 24% discount to the median of 27X.

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Bottom Line

With healthcare insurance and biomedicine being very lucrative areas of the economy in terms of growth investors may want to consider adding Cigna and Regeneron stocks to their portfolios as they have continued to outperform the broader market.

More importantly, the guidance and outlook the companies are able to give during the fourth quarter reports will give insight into the possibility of their strong performances and growth continuing with Cigna stock sporting a Zacks Rank #2 (Buy) at the moment and Regeneron landing a Zacks Rank #3 (Hold)).


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Regeneron Pharmaceuticals, Inc. (REGN) - free report >>

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