Core Insights - The Cigna Group reported strong third quarter 2025 results, with a net income of $1.9 billion, or $6.98 per share, reflecting a significant increase from $0.7 billion, or $2.63 per share, in the same quarter of 2024 [2][7] - Total revenues for the third quarter 2025 increased by 10% to $69.7 billion compared to the third quarter 2024, driven primarily by growth in Evernorth Health Services and specialty pharmacy [4][7] - The company introduced a new rebate-free pharmacy benefit model aimed at reducing costs and enhancing transparency for customers [2][7] Financial Performance - Adjusted income from operations for the third quarter 2025 was $2.1 billion, or $7.83 per share, slightly up from $2.1 billion, or $7.51 per share, in the third quarter 2024 [3][7] - The adjusted revenues for the third quarter 2025 were $69.57 billion, compared to $63.69 billion in the third quarter 2024, marking a 9% increase [4][7] - The SG&A expense ratio improved to 4.8% in the third quarter 2025 from 5.6% in the same quarter of 2024, indicating better cost management [5][32] Customer Relationships - Total customer relationships as of September 30, 2025, were 182.5 million, reflecting a 2% increase from December 31, 2024, excluding the impact of the HCSC transaction [12] - Total pharmacy customers increased by 4% to 122.5 million, while total medical customers decreased by 6% to 18.1 million, primarily due to the HCSC transaction [12][8] Segment Results - Evernorth Health Services reported a 15% increase in adjusted revenues and a 1% increase in adjusted income from operations, pre-tax, compared to the third quarter 2024 [21] - Pharmacy Benefit Services saw an 18% increase in adjusted revenues, while adjusted income from operations decreased by 6% due to strategic investments [21] - Specialty and Care Services experienced a 10% increase in adjusted revenues and an 11% increase in adjusted income from operations, pre-tax, driven by strong specialty volume growth [21] Outlook - The Cigna Group reaffirmed its outlook for 2025, projecting adjusted income from operations of at least $29.60 per share [18][19] - The company anticipates continued growth in its Evernorth segment, with a projected adjusted income from operations of at least $7.2 billion [19]

Group 1 - The Cigna Group is recognized as one of the 13 Most Undervalued Dividend Stocks to Buy according to Wall Street Analysts [1] - JPMorgan has maintained an Overweight rating on Cigna following an update regarding its Evernorth unit and a new model for Express Scripts starting in 2027 [2][3] - The new model for Express Scripts eliminates rebates and introduces a point-of-sale approach, allowing customers to pay a net price at the time of dispensing [3][4] Group 2 - The analyst believes the change addresses several regulatory proposals and should "de-risk" Express Scripts' commercial operations [4] - Cigna's shift to a de-linked and rebate-free default offering is seen as a viable approach for the broader business [4] - Cigna has increased its dividend for five consecutive years, with a current dividend yield of 2.02% as of October 29 [4]

Core Insights - The Cigna Group is scheduled to report its third-quarter 2025 results on October 30, 2025, with earnings estimated at $7.70 per share and revenues of $67.16 billion [1][7]. Earnings Estimates - The earnings estimate for Q3 2025 has increased by $0.01 over the past 60 days, indicating a year-over-year growth of 2.5%, while revenues are projected to grow by 5.4% year-over-year [2]. - For the full year 2025, the revenue estimate stands at $267.39 billion, reflecting an 8.2% increase year-over-year, and the EPS estimate is $29.69, signaling an 8.6% growth [3]. Performance Indicators - Cigna has beaten earnings estimates in three of the last four quarters, with an average surprise of negative 1.2% [3]. - The company has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold), indicating uncertainty regarding an earnings beat this quarter [4]. Revenue Breakdown - Evernorth revenues are expected to rise by 9%, with pharmacy and fee income showing double-digit growth [7]. - Pharmacy revenues are projected to improve by 10.1% year-over-year, while fees and other revenues are expected to grow by 10.3% [8]. - The overall Evernorth Health Services segment is estimated to generate $57.2 billion in revenues, indicating a 9% growth from the prior year [9]. Challenges - Premiums are expected to decline by 21.1% year-over-year, with total medical customers projected to decrease to 18.1 million from 19 million a year ago [9]. - Cigna Healthcare revenues are estimated to decrease by 17.9%, with pre-tax adjusted income expected to decline by 13.7% year-over-year [10]. - The medical care ratio (MCR) is projected to rise to 84.15%, up from 82.80% a year ago, indicating pressure on margins due to higher pharmacy and service costs [10]. Peer Performance - UnitedHealth reported adjusted EPS of $2.92, beating estimates but reflecting a 59.2% year-over-year decline [11]. - Molina Healthcare's adjusted EPS of $1.84 missed estimates, with a 69.4% year-over-year decline attributed to higher medical care costs [12]. - Elevance Health reported adjusted EPS of $6.03, surpassing estimates but showing a 29.9% year-over-year drop due to elevated expenses [13].

Core Viewpoint - Analysts forecast that Cigna (CI) will report quarterly earnings of $7.70 per share, reflecting a year-over-year increase of 2.5%, with revenues expected to reach $67.16 billion, a 5.4% increase compared to the previous year [1]. Revenue Estimates - The consensus estimate for 'Revenues- Pharmacy' is $53.14 billion, indicating a year-over-year change of +10.1% [5]. - 'Revenues- Premiums' are projected to be $9.03 billion, suggesting a decline of -21.1% year over year [5]. - 'Revenues- Net investment income' is expected to be $245.97 million, showing a significant increase of +189.4% from the prior-year quarter [5]. - 'Revenues- Evernorth Health Services' are anticipated to reach $57.17 billion, reflecting a +9% change from the previous year [6]. - 'Revenues- Cigna Healthcare' is projected at $10.95 billion, indicating a decrease of -17.9% year over year [6]. - 'Revenues- Fees and Other' are expected to be $4.29 billion, showing a +10.3% change from the prior year [6]. Services and Fees Estimates - 'Services (Fees)- Evernorth Health Services' is forecasted to reach $3.69 billion, indicating a year-over-year change of +11.3% [7]. - 'Services (Fees)- Cigna Healthcare' is estimated at $1.89 billion, reflecting a +13.4% change from the previous year [7]. Customer Metrics - 'Premiums- Cigna Healthcare- U.S. Healthcare- Individual and Family Plans' is estimated at $877.94 million, indicating a decline of -12.3% year over year [8]. - The 'Medical Care Ratio - Cigna Healthcare' is projected to be 84.2%, up from 82.8% in the same quarter last year [8]. - 'Healthcare Medical Customers - Administrative services only - U.S. Healthcare' is expected to reach 13.78 million, compared to 13.57 million a year ago [9]. - 'Medical Customers - Total' is projected at 18.06 million, down from 19.05 million in the previous year [9]. Stock Performance - Over the past month, Cigna shares have recorded a return of +5.5%, outperforming the Zacks S&P 500 composite's +2.5% change [9].

Core Viewpoint - Cigna Group is introducing a new rebate-free pharmacy benefit model aimed at reducing drug costs directly at the point of sale [1] Group 1 - The new model is designed to eliminate rebates, which are often used in traditional pharmacy benefit structures [1] - This initiative is expected to provide more transparency in drug pricing and potentially lower out-of-pocket costs for consumers [1] - Cigna's approach may influence the broader healthcare industry by encouraging other companies to adopt similar models [1]

Core Insights - Offshore energy firm Petrofac has filed for administration due to financial strain and the termination of a major contract with Dutch grid operator TenneT, affecting 2,000 jobs in Scotland [1] Company Summary - Petrofac has experienced a challenging financial year, leading to its decision to file for administration [1] - The termination of a significant contract with TenneT has been a critical factor in the company's financial difficulties [1] - The administration filing puts approximately 2,000 jobs at risk in Scotland, highlighting the potential impact on the local economy [1] Industry Summary - The offshore energy sector is facing increased pressures, as evidenced by Petrofac's situation, which may indicate broader challenges within the industry [1] - The loss of major contracts, such as the one with TenneT, suggests potential volatility and risk for companies operating in this space [1]

Core Insights - Cigna Group's decision to eliminate prescription drug rebates from many of its health plans represents a significant transformation in the US pharmaceutical supply chain [1] Group 1 - The elimination of prescription drug rebates is one of the largest changes in the US pharmaceutical supply chain in decades [1]

This story was originally published on Healthcare Dive. To receive daily news and insights, subscribe to our free daily Healthcare Dive newsletter. Dive Brief: One of the largest pharmacy benefits managers in the U.S. is overhauling how millions of its commercial members pay for drugs, in a move that should save consumers money at the pharmacy counter while insulating it from regulatory reform — all without affecting long-term profits. On Monday, Evernorth — Cigna’s health services division that inclu ...

Core Viewpoint - Cigna Group plans to eliminate prescription drug rebates in many of its commercial health plans by 2027, transitioning to a rebate-free model to lower patient costs at the pharmacy counter through up-front discounts instead of delayed rebates [1][2][3] Group 1: Changes in Cigna's Business Model - The elimination of rebates is expected to create a significant shift in the financial dynamics among drugmakers, insurers, and employers, with the value of drug rebates and discounts reaching $356 billion last year [3][4] - Cigna aims to provide an average 30% discount on brand medications for patients with high-deductible plans, enhancing affordability [6] - The initial rollout will affect approximately 2 million fully insured health plan members, with a broader implementation for Express Scripts clients starting in 2028 [7] Group 2: Market Context and Reactions - The decision aligns with the Trump administration's efforts to reduce drug prices, as Cigna's CEO praised Trump's actions to lower costs for brand-name medicines [8][9] - Cigna's Express Scripts is the largest pharmacy benefit manager (PBM), facing scrutiny from lawmakers and the Federal Trade Commission regarding the rebate system's impact on drug prices [8][10] Group 3: Industry Implications - Other PBMs, such as Optum Rx and CVS Caremark, are also adapting their models in response to regulatory pressures, with some moving towards passing rebates directly to clients [11] - Cigna will need to renegotiate contracts with drugmakers and health plans to implement the new model, which is expected to be welcomed by drugmakers as it may encourage patients to fill prescriptions [12][13] - The goal is to have half of employer and health plan clients adopt the new model within three years, with Express Scripts serving around 100 million members [13] Group 4: Future Considerations - While eliminating rebates could potentially raise premiums for some clients, Cigna's leadership does not anticipate an increase in costs [14] - The company acknowledges that rebates will still exist for the foreseeable future, but aims to transition to a more transparent pricing approach [15] - Cigna has also opened new revenue streams from drugmakers through fees that resemble rebates but are structured differently, indicating a shift in compensation models [16][17]

Core Insights - Evernorth, the health services division of The Cigna Group, has introduced a new rebate-free pharmacy benefit model aimed at lowering costs and improving transparency for Americans while supporting local pharmacies [1][2][12] Summary by Sections New Pharmacy Benefit Model - The new model eliminates the complex post-purchase rebate process, allowing discounts negotiated with drug companies to be available upfront to consumers [2][3] - This approach is expected to reduce monthly costs for brand-name prescriptions by an average of 30% for individuals with high-deductible health plans [3][4] Cost Reduction and Transparency - Evernorth's model ensures that Americans pay the lowest available cost for both brand-name and generic medicines by leveraging technology to compare multiple pricing options [4][5] - For example, a negotiated cost of $22 (70% off the list price) and a cash discount of $20 illustrate the potential savings for consumers [5] Support for Local Pharmacies - Evernorth is adopting a new reimbursement model that compensates local pharmacies based on their costs plus a dispensing fee, recognizing the essential clinical services they provide [9][10] - This model will be implemented across all in-network pharmacies starting in 2026, ensuring that local pharmacies have the resources to excel in patient care [11] Commitment to Innovation - The new pharmacy benefit model builds on Evernorth's legacy of driving affordability and access to medications, including the use of generics and biosimilars [12][13] - The company aims to continue innovating to improve health outcomes for millions of Americans [12]