Cigna (CI) benefits from a diversified activity and a capital position


Cigna Corp. CI is well positioned for growth thanks to its diverse business profile and consistent cash flow generation.

Recently, the company launched the Evernorth segment, which includes the old healthcare services segment. It experiences continuous organic growth thanks to client wins and increased script volumes. The efficient execution of supply chain initiatives, stable performance and expansion of specialty pharmacy services through Accredo, its industry-leading specialty pharmacy, bodes well for this segment.

The company is on track to achieve growth within its pharmacy services portfolio, including advancements in the specialty and the underlying scenario, aided by an expected 98% customer retention rate. Its activities with the US government continue to develop precisely the Medicare advantage, in which the company continues to enjoy a strong market share and drive the expansion of its products. In addition, it is growing in the market, putting itself on track for a larger customer base with the target set in the 10-15% range for 2021. In the sole proprietorship segment, the company increased its footprint in the addressable market by more than 50%.

All of these prepare the company well for strong sales and steady earnings growth in 2021. In fact, it remains on track to meet its strategic goal of $ 20 to $ 21 EPS.

The company’s Medicare Advantage business achieved an annual Customer Net Promoter (NPS) score of over 74, making 2020 the fourth consecutive year in which it has achieved an NPS mark. In addition, in 2021, 88% of customers will benefit from four-star plus packages. This places the company well for securing a plum market share from Medicare Advantage, which is very promising and represents a great business opportunity for all health insurers.

In addition, the company’s international operations continue to generate revenue and profit growth.

The US medical segment of society, however, is expected to moderate its profits somewhat as medical use returns to normal levels.
An increase in the levels of medical use will lead to higher medical costs.

A strong operational dynamic enables the company to generate attractive operational cash flows. For 2020, cash flows above $ 8 million are expected. This significant generation of cash flow by the company combined with its ongoing deleveraging will give it substantial strategic momentum and provide it with adequate financial flexibility for 2021 and beyond.

Most impressive is the strong earnings forecast released by the company in which it projects consolidated adjusted revenue of around $ 158 billion for 2020, showing growth of 53% and earnings per share of between 18.3 and 18, $ 6, suggesting growth of 37.3% over respective reports. Baselines 2019.

Since the beginning of the year, the title has fallen by 1.5% against an 8.8% growth in its industry.

Other stocks in the same space include UnitedHealth Group Inc. A H), Humana Inc. HUM and Molina Health Inc. MOH, who gained 18.2%, 18% and 58.8% over the same period.

Cigna currently wears a Zacks Rank # 3 (Hold). You can see The full list of today’s Zacks # 1 Rank (Strong Buy) stocks here.

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