Cigna(CI) ZACKS·2024-11-27 20:01Core Viewpoint - Cigna Group is experiencing strong growth driven by solid pharmacy revenues, a robust medical customer base, strategic acquisitions, and a strong financial position, with optimistic guidance for 2024 acting as a tailwind [1][7]. Financial Performance - Cigna's stock has increased by 17.1% over the past year, outperforming the industry growth of 6.9% [3]. - The Zacks Consensus Estimate for Cigna's 2024 earnings is 243.8 billion, indicating a 24.8% rise [5]. - For 2025, earnings are estimated at 249.8 billion, a 2.5% increase from the 2024 estimate [5]. Growth Drivers - Cigna's growth is supported by two main platforms: Evernorth and Cigna Healthcare, with management expecting average annual adjusted earnings per share growth of 10-14% in the long term [8]. - Evernorth's specialty pharmacy services have led to a 35% year-over-year increase in pharmacy revenues in the first nine months of 2024 [9]. - Cigna Healthcare benefits from a large customer base in U.S. Healthcare operations, with projected long-term earnings growth of 7-10% and strong demand for Medicare plans due to an aging population [10]. Strategic Initiatives - Cigna is focused on product innovation, collaborations, and strategic acquisitions to enhance capabilities and market presence, while divesting non-health-related units to concentrate on high-growth areas [11]. - The company has robust cash reserves and projects operating cash flows of approximately $60 billion over the next five years, allowing for business expansion and shareholder returns through dividends and share repurchases [12]. Dividend and Shareholder Returns - Cigna approved a 14% increase in its quarterly dividend, with a current dividend yield of 1.7%, higher than the industry average of 1.4% [12].