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Valued at a market cap of $84.8 billion, The Cigna Group (CI) is a global health company that has two growth platforms: Evernorth Health Services and Cigna Healthcare. The Bloomfield, Connecticut-based company provides insurance and related products and services.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and Cigna Group fits this criterion perfectly. CI maintains sales capabilities in more than 30 markets and jurisdictions and has approximately 182 million customer relationships around the world that offer to solve diverse challenges across the healthcare system.
The multinational insurance company declined 16.4% from its 52-week high of 370.83. Over the last three months, Cigna Group stock has fallen 3.9%, lagging behind the iShares Global Healthcare ETF’s (IXJ) 3% rise during the same timeframe.
Over the last 52 weeks, Cigna Group shares have slipped 6.9%, while the IXJ has surged 3.2% in the same period. However, CI has gained 12.2% on a YTD basis, exceeding IXJ’s 9.6% increase.
CI has been trading below its 50-day and 200-day moving averages since October last year with some recent fluctuations.
Despite reporting better-than-expected Q4 2024 adjusted revenue of $65.7 billion, Cigna shares dropped 6.7% on Jan. 30. Adjusted EPS of $6.64 fell below the consensus estimate, and adjusted operating income declined 8% year-over-year to $1.8 billion, driven by a steep 47% drop in Cigna Healthcare's pre-tax operating income to $511 million. The medical care ratio (MCR) deteriorated to 87.9%, reflecting higher medical costs, while the total medical customer base shrank 3.2% year-over-year to 19.1 million.
Additionally, Cigna warned that it would take two years to recover compressed margins and provided a 2025 EPS outlook of $29.50, falling short of analysts’ estimates.
Moreover, in comparison, its rival, Elevance Health, Inc. (ELV), performed weaker than CI. Shares of ELV increased 7.7% on a YTD basis. But, ELV has dipped 20.2% over the past 52 weeks, lagging behind CI.
Due to CI’s strong price action on a YTD basis, analysts remain bullish about its prospects. Among the 22 analysts covering the stock, there is a consensus rating of “Strong Buy,” and it is currently trading below the mean price target of $365.24.
