Cigna Corp ( CI ) beat both top and bottom line estimates for its first quarter in a report issued Friday.
The insurer posted total revenues of $44.0 billion, ahead of Wall Street's estimates of $43.6 billion.
Cigna reported net income of $1.2 billion, or $3.68 per share, and adjusted profit of $6.01 per share, trouncing estimates of $5.18 per share.
The company reported nearly 10% growth in Evernorth, its health services business which includes pharmacy benefits management. The unit posted adjusted revenue of $33.6 billion for the quarter.
Cigna's larger rivals, including UnitedHealth ( UNH ) and Anthem ( ANTM ) also ticked up their full year forecasts in April.
“We’ve had a strong start to the year as we advance our growth strategy and support the health and well-being of our
clients and customers,” said Chairman and CEO David M. Cordani.
Raises Full Year 2022 Outlook
Cigna guided modestly higher for the full year, raising its adjusted profit forecast to at least $22.60 per share, from its prior estimate of at least $22.40 per share.
Investment thesis
6 months:
3 months:
- As you can see from the charts, Cigna has effectively done a round trip to meet up with the S&P 500 after a divergent path over the past year.
- More recent trends point to significant outperformance by Cigna vs the benchmark index over the last six and three months, and we think that trend will continue.
- Cigna is more nimble than its larger competitors, and we think it will benefit from macro trends in healthcare coverage as we move further and further past the worst of Covid.
- CEO Cordani said, “We’re taking decisive steps forward with innovation, new partnerships and re-investing in our company so we can achieve greater impact for the customers and communities we’re privileged to serve.”
- The company has a demonstrable track record of growth through a litany of changes to the healthcare insurance landscape, posting 15% CAGR since 2010.
- Cigna's dividend, yielding 1.75%, is significantly higher than UnitedHealthcare's or Anthem's, which each yield about 1%.
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Source: Equities News
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