The Cigna Group CI is scheduled to release third-quarter 2024 results on Oct. 31, before the opening bell. The Zacks Consensus Estimate for earnings per share is pegged at $7.22, which indicates a 6.6% rise from the prior-year quarter’s number.
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The third-quarter earnings estimate has witnessed one downward revision over the past 60 days. During this time, the estimate has gone down 0.3%. Meanwhile, the Zacks Consensus Estimate for revenues is pegged at $59.8 billion, indicating 21.9% growth from the year-ago quarter’s figure.
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Cigna’s Earnings Surprise History
Cigna’s bottom line beat estimates in each of the trailing four quarters, the average surprise being 3.83%. This is depicted in the chart below:
The Cigna Group Price and EPS Surprise
The Cigna Group price-eps-surprise | The Cigna Group Quote
What Our Quantitative Model Predicts for CI
Our proven model does not conclusively predict an earnings beat for Cigna this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here, as you see below.
Earnings ESP: Cigna has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: CI currently has a Zacks Rank #4 (Sell).
Factors to Note Ahead of CI’s Results
Cigna’s revenues are likely to have benefited on the back of solid pharmacy revenues stemming from a well-performing specialty pharmacy business within the Evernorth segment. The unit is also expected to have gained on new client wins and strong customer retention rates.
The Zacks Consensus Estimate for pharmacy revenues is pegged at $44.5 billion, which implies a 28.8% improvement from the prior-year quarter’s number. We expect pharmacy revenues to grow 27.8% year over year in the third quarter. The consensus mark for adjusted revenues of the Evernorth segment is pegged at $49 billion, indicating 26.8% growth from the prior-year quarter’s figure.
A strong customer base within the U.S. employer Select and Middle market segments is expected to have provided an impetus to the performance of the Cigna Healthcare segment. A diversified and cost-effective health plan suite, as well as the roll out of such plans across different geographic regions, is likely to have fetched customer wins to Cigna .
The consensus mark for Cigna’s total medical customers is pegged at 19.2 million. We estimate the metric at 19.1 million as of Sept. 30, 2023.
However, a decline in net investment income is likely to have been a roadblock to Cigna’s revenue growth. We expect net investment income to decline 19.4% year over year.
Its margins are expected to have suffered a blow due to an elevated medical cost level resulting from continued higher utilization trends and unit cost inflation. This, in turn, is likely to have led to an elevated medical care ratio (MCR) of Cigna. We expect medical costs and other benefit expenses to increase 7% year over year. The consensus mark for MCR is pegged at 83%, which indicates a deterioration of 246 basis points year over year.
CI Stock’s Price Performance
Cigna’s shares have gained 2.9% year to date compared with the industry’s 0.6% growth. Meanwhile, the Zacks Medical sector and the S&P 500 index rose 3.7% and 22.5%, respectively, in the said time frame.
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Stocks to Consider
Here are some companies from the Medical space, which according to our model, have the right combination of elements to beat on earnings this time around:
Collegium Pharmaceutical, Inc. COLL has an Earnings ESP of +1.23% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for COLL’s third-quarter earnings is pegged at $1.63 per share, which implies a 21.6% rise from the year-ago quarter’s figure.
Collegium Pharmaceutical’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 7.01%.
Masimo Corporation MASI currently has an Earnings ESP of +0.40% and a Zacks Rank of 2. The Zacks Consensus Estimate for MASI’s third-quarter earnings is pegged at 84 cents per share, which implies a 33.3% rise from the year-ago quarter’s figure.
Masimo’s earnings beat estimates in each of the trailing four quarters, the average surprise being 14.63%.
Regeneron Pharmaceuticals, Inc. REGN has an Earnings ESP of +2.65% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for REGN’s third-quarter earnings is pegged at $11.75 per share, which implies a 1.4% rise from the year-ago quarter’s figure.
Regeneron Pharmaceuticals’ earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 6.01%.
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Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report
Cigna Group (CI) : Free Stock Analysis Report
Masimo Corporation (MASI) : Free Stock Analysis Report
Collegium Pharmaceutical, Inc. (COLL) : Free Stock Analysis Report
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