) is set to report first-quarter 2014 results before the opening
bell on May 1. In the last reported quarter, the company's
earnings missed the Zacks Consensus Estimate by 6.1%. Let's see
how things are shaping up for this announcement.
Factors Likely to Influence Q1 Results
Cigna is a niche player in the health insurance industry. The
company's strengths are evident in multiple areas, such as robust
revenue growth and a largely solid financial position with
reasonable debt levels.
The company's expanding international business with expansion
in Turkey, India and China is also expected to aid earnings.
Meanwhile, Cigna's growing U.S., global healthcare businesses,
disability and Life business as well as global supplemental
business is likely to contribute to its top-line
However, the business environment remains challenged due to a
number of provisions of the Health Care Act, which has become
applicable this year. Uncertainly relating to Medicare Advantage
reimbursement levels, cost pressure resulting from reduction in
hospital reimbursement levels due to government cuts and
implementation challenges in public exchanges are expected to
induce volatility to the company's earnings.
Our proven model does not conclusively show that Cigna is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. However,
that is not the case here as you will see below.
With Cigna's Most Accurate estimate pegged at $1.53, in
line with the Zacks Consensus Estimate, Zacks ESP is
Cigna's Zacks Rank #3 (Hold) increases the predictive power of a
positive surprise. However, when combined with a 0.00% ESP makes
surprise prediction difficult. We caution against stocks with
Zacks #4 and #5 Ranks (Sell-rated stocks) going into the earnings
announcement, especially when the company is seeing a negative
estimate revision momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows that these have the right combination of elements to
post an earnings beat this quarter:
), earnings ESP of +1.22% and a Zacks Rank #2 (Buy).
RenaissanceRe Holdings Ltd.
), earnings ESP of +3.15% and a Zacks Rank #1 (Strong Buy).
), earnings ESP of +1.41% and Zacks Rank #2 (Buy).
ACE LIMITED (ACE): Free Stock Analysis Report
CIGNA CORP (CI): Free Stock Analysis Report
PRIMERICA INC (PRI): Free Stock Analysis
RENAISSANCERE (RNR): Free Stock Analysis
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