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Cigna (CI) Hits 52-Week High: What's Driving the Stock?
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Cigna Corporation’s (CI - Free Report) shares scaled a new 52-week high of $339.51 on Dec 12, before closing the session marginally lower at $339.30.
In the past year, this Zacks Rank #3 (Hold) stock has gained 57.7% compared with the 3.2% growth of the industry and against the S&P 500 composite’s fall of 17.4%.
Image Source: Zacks Investment Research
Cigna’s stock price is increasing on the back of multiple positive factors. Solid performances of the Evernorth and Cigna Healthcare businesses are fuelling growth.
Its earnings growth history is also impressive. Over the past five years, CI’s bottom-line growth of 17.5% outperformed the industry average of 8.2%. The company beat earnings estimates in each of the past four quarters, with an average of 9.8%.
The Zacks Consensus Estimate for Cigna’s 2022 earnings is pegged at $23.14 per share, indicating a 13% rise from $20.47 a year ago. It has witnessed four upward estimate revisions in the past 30 days against no movement in the opposite direction. The consensus estimate for 2022 revenues is pegged at $178.7 billion, signaling a 2.7% year-over-year rise.
The reaffirmed forecast last month has aided the stock’s momentum. Solid customer retention and new client wins are expected to benefit its U.S. commercial business. This is likely to enable CI to reach its 2022 earnings goal of a minimum of $23.10 per share.
Strategic acquisitions are helping the company to expand its scale and tap into new markets. This will enable the company to increase memberships. CI anticipates total medical customer growth of at least 900,000 in 2022 compared with the prior mentioned number of at least 800,000.
With the growing proportion of older people in the population, the demand for Cigna’s products is expected to increase. Also, rising employment and economic recovery will benefit its commercial business. This is expected to lead to higher premiums.
Cigna’s focus on enhancing pharmacy offerings in 2023 can be a significant growth driver. It revealed plans to include biosimilars as preferred products within its commercial formularies from 2023. The biosimilars, approved by the FDA, are prescription medications that are quite affordable, safe to consume and have proved to be effective. This move reflects Cigna’s continuous efforts to bring substantial cost savings and increased choices to its clients who want to avail of specialty medications.
While the factors stated above are driving the stock, there are a few headwinds to look out for. A debt-laden balance sheet and rising operating expenses are concerning.
At the September-quarter end, CI had a long-term debt of $28,090 million and a short-term debt of $3,488 million. Total benefits and expenses also rose 5% year over year in the first nine months of 2022. Nevertheless, we believe that a systematic and strategic plan of action will keep driving the company’s long-term growth.
The Zacks Consensus Estimate for Elevance Health’s full-year earnings is pegged at $29.02 per share, indicating a year-over-year increase of 11.7%. ELV beat earnings estimates in the past four quarters, with an average surprise of 4.1%.
The Zacks Consensus Estimate for MedAvail Holdings’ current-year bottom line indicates a 37.3% improvement from the prior-year reported number. MDVL has witnessed one upward estimate revision in the past 30 days against none in the opposite direction.
The Zacks Consensus Estimate for Progyny’s 2022 bottom line has increased 16.7% in the past 60 days. PGNY beat earnings estimates in all the past four quarters, with an average surprise of 233.8%.
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Cigna (CI) Hits 52-Week High: What's Driving the Stock?
Cigna Corporation’s (CI - Free Report) shares scaled a new 52-week high of $339.51 on Dec 12, before closing the session marginally lower at $339.30.
In the past year, this Zacks Rank #3 (Hold) stock has gained 57.7% compared with the 3.2% growth of the industry and against the S&P 500 composite’s fall of 17.4%.
Image Source: Zacks Investment Research
Cigna’s stock price is increasing on the back of multiple positive factors. Solid performances of the Evernorth and Cigna Healthcare businesses are fuelling growth.
Its earnings growth history is also impressive. Over the past five years, CI’s bottom-line growth of 17.5% outperformed the industry average of 8.2%. The company beat earnings estimates in each of the past four quarters, with an average of 9.8%.
The Zacks Consensus Estimate for Cigna’s 2022 earnings is pegged at $23.14 per share, indicating a 13% rise from $20.47 a year ago. It has witnessed four upward estimate revisions in the past 30 days against no movement in the opposite direction. The consensus estimate for 2022 revenues is pegged at $178.7 billion, signaling a 2.7% year-over-year rise.
The reaffirmed forecast last month has aided the stock’s momentum. Solid customer retention and new client wins are expected to benefit its U.S. commercial business. This is likely to enable CI to reach its 2022 earnings goal of a minimum of $23.10 per share.
Strategic acquisitions are helping the company to expand its scale and tap into new markets. This will enable the company to increase memberships. CI anticipates total medical customer growth of at least 900,000 in 2022 compared with the prior mentioned number of at least 800,000.
With the growing proportion of older people in the population, the demand for Cigna’s products is expected to increase. Also, rising employment and economic recovery will benefit its commercial business. This is expected to lead to higher premiums.
Cigna’s focus on enhancing pharmacy offerings in 2023 can be a significant growth driver. It revealed plans to include biosimilars as preferred products within its commercial formularies from 2023. The biosimilars, approved by the FDA, are prescription medications that are quite affordable, safe to consume and have proved to be effective. This move reflects Cigna’s continuous efforts to bring substantial cost savings and increased choices to its clients who want to avail of specialty medications.
While the factors stated above are driving the stock, there are a few headwinds to look out for. A debt-laden balance sheet and rising operating expenses are concerning.
At the September-quarter end, CI had a long-term debt of $28,090 million and a short-term debt of $3,488 million. Total benefits and expenses also rose 5% year over year in the first nine months of 2022. Nevertheless, we believe that a systematic and strategic plan of action will keep driving the company’s long-term growth.
Key Picks
Some better-ranked stocks in the broader medical space are Elevance Health Inc. (ELV - Free Report) , MedAvail Holdings, Inc. and Progyny, Inc. (PGNY - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Elevance Health’s full-year earnings is pegged at $29.02 per share, indicating a year-over-year increase of 11.7%. ELV beat earnings estimates in the past four quarters, with an average surprise of 4.1%.
The Zacks Consensus Estimate for MedAvail Holdings’ current-year bottom line indicates a 37.3% improvement from the prior-year reported number. MDVL has witnessed one upward estimate revision in the past 30 days against none in the opposite direction.
The Zacks Consensus Estimate for Progyny’s 2022 bottom line has increased 16.7% in the past 60 days. PGNY beat earnings estimates in all the past four quarters, with an average surprise of 233.8%.