We are reiterating our Neutral recommendation on
) following the fourth quarter earnings release. Cigna reported a
solid fourth quarter which included a 6.08% positive earnings
The year 2012 was the third consecutive year of profitable
growth. Over the last 3 years, the company delivered 17%
compound revenue growth and 15% compound earnings per share
growth. However, a number of challenges in the health insurance
market related to the Heath Care Reform may pose uncertainty over
the company's performance in 2013.
Cigna has a well diversified business profile with reach in
different markets besides a broad product portfolio.
Moreover, Cigna has strengthened its market position through
strategic acquisitions, most notably HealthSpring.
The company also has significant overseas business which is
generating strong earnings.
Cigna's strong result for 2012 reflects its solid balance sheet
and free cash flow outlook for 2013. This multi-line insurer with
a Zacks Rank #2 (Buy) is comfortably poised to further enhance
Cigna continues to strengthen its physician partnerships through
more than 50 Collaborative Accountable Care initiatives that span
22 states, which when combined with the HealthSpring senior
solutions, already serve nearly 1 million customers.
On the flip side Cigna is witnessing a decline in margins in its
health care and disability segments due to a challenging market
place. We expect the trend to continue over the near term as the
health insurance market place undergoes significant changes in
the face of the Health Care Reform.
Assured Guaranty Ltd.
FBL Financial Group Inc.
) under our coverage carry Zacks Rank #1 (Strong Buy) and are
AEGON N V (AEG): Free Stock Analysis Report
ASSURED GUARNTY (AGO): Free Stock Analysis
CIGNA CORP (CI): Free Stock Analysis Report
FBL FINL GRP-A (FFG): Free Stock Analysis
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