Cigna (CI) shares rose more than 6% after the company released Q1 2022 results, which exceeded consensus estimates. Connecticut-based Cigna offers health insurance services and participates in government health insurance programs such as Medicare plans.
Q1 Earnings Numbers
Revenue of $44 billion rose from $40.97 billion for the same quarter last year and surpassed the consensus estimate of $43.42 billion. Earnings per share (EPS) of $6.01 increased from $4.73 for the same quarter last year and beat the consensus estimate of $5.17.
Cigna CEO, David M. Cordani, said, “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…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.”
Cigna anticipates revenue of at least $177 billion for the full year 2022, while the consensus estimate calls for revenue of $178.9 billion. The company expects EPS of at least $22.60, ahead of the consensus estimate of $22.49.
The outlook includes the expected impact of share repurchases and pending divestitures of the international life insurance and supplemental benefits operations. Cigna hopes to complete the divestures in Q2.
Wall Street’s Take
On May 6, Mizuho Securities analyst Ann Hynes reiterated a Buy rating on Cigna with a price target of $291, which indicates 9% upside potential.
The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on eight Buys versus five Holds. At the time of writing, the average Cigna price forecast of $283.58 implies 6.25% upside potential. Shares have increased 25% over the past six months.
TipRanks data shows that financial blogger opinions are 89% Bullish on Cigna, compared to a sector average of 71%.
Key Takeaway for Investors
As a diversified health services company, Cigna has multiple growth opportunities. The management has demonstrated prudence in its execution, which can be seen from its exit from markets that may not be a strategic fit for the company’s long-term growth and profitability.
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