Cigna Group (CI) Soars to 52-Week High, Time to Cash Out?

Have you been paying attention to shares of Cigna (CI)? Shares have been on the move with the stock up 3% over the past month. The stock hit a new 52-week high of $349.13 in the previous session. Cigna has gained 16.5% since the start of the year compared to the 7.9% move for the Zacks Medical sector and the -4.1% return for the Zacks Medical - HMOs industry.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 2, 2024, Cigna reported EPS of $6.79 versus consensus estimate of $6.52 while it beat the consensus revenue estimate by 4.77%.

For the current fiscal year, Cigna is expected to post earnings of $28.34 per share on $235.12 billion in revenues. This represents a 12.95% change in EPS on a 20.37% change in revenues. For the next fiscal year, the company is expected to earn $31.93 per share on $243.78 billion in revenues. This represents a year-over-year change of 12.65% and 3.69%, respectively.

Valuation Metrics

Cigna may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Cigna has a Value Score of A. The stock's Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 12.3X current fiscal year EPS estimates, which is not in-line with the peer industry average of 17.1X. On a trailing cash flow basis, the stock currently trades at 9.7X versus its peer group's average of 10.1X. Additionally, the stock has a PEG ratio of 1.07. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Cigna currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Cigna meets the list of requirements. Thus, it seems as though Cigna shares could have potential in the weeks and months to come.

Only $1 to See All Zacks' Buys and Sells

We're not kidding.

Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.

Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more. They've already closed 162 positions with double- and triple-digit gains in 2023 alone.

See Stocks Now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Cigna Group (CI) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.