Cigna forecasts at least 10 profit growth for 2025
Cigna forecasts at least 10 profit growth for 2025

Cigna Forecasts 2025 Profit Growth of at Least 10%

Cigna Forecasts 2025 Profit Growth of at Least 10% After Beating Quarterly Expectations

Reuters – October 31: Cigna projected at least a 10% profit growth for 2025 after delivering a quarterly performance that surpassed Wall Street’s expectations, primarily driven by strong demand for its specialty drugs and new clients for its pharmacy benefit management unit. The health insurer’s shares rose by nearly 3% following the announcement.

Key highlights from Cigna’s quarterly report:

  • Biosimilars Success: Cigna benefited from increased adoption of biosimilars, especially for AbbVie’s arthritis drug Humira, where around one-third of eligible prescriptions transitioned to biosimilars. The company also began distributing Humira biosimilars through its specialty pharmacy, Accredo, at no out-of-pocket cost for patients.
  • Future Drug Launches: Cigna plans to offer a biosimilar to Johnson & Johnson’s psoriasis drug Stelara by 2025, further boosting its revenue prospects.
  • Evernorth Growth: Revenue for Cigna’s Evernorth healthcare services unit, which includes its pharmacy benefit management business, surged by 36% to $52.64 billion. Evernorth’s success was bolstered by its role in negotiating drug prices on behalf of employers and health plan clients.
  • 2024 Medical Cost Trends: Cigna expects its medical cost ratio (MCR), which reflects the percentage of premiums spent on medical care, to trend toward the higher end of its forecasted range of 81.7% to 82.5%, largely due to the increased use of expensive specialty drugs. The company maintained its adjusted earnings forecast for 2024 at a minimum of $28.40 per share.
  • Medicare Advantage Market: Cigna continues to focus on employer-sponsored healthcare management, and is currently in the process of selling its Medicare Advantage business. CEO David Cordani described the Medicare Advantage market as “highly disrupted.” While there were media speculations about renewed talks to acquire Humana, Cigna’s leadership signaled that a large-scale acquisition is unlikely.
  • Quarterly Financials: For Q3 2024, Cigna posted a net income of $739 million, or $2.63 per share, marking a decline of 47.5% due to a $1 billion non-cash after-tax investment loss related to its stake in VillageMD. However, adjusted profit per share stood at $7.51, exceeding analysts’ expectations by $0.31. The company reported total revenue of $63.7 billion, above the $59.4 billion forecast by analysts.

Key Financial Data (Q3 2024)

Metric Q3 2024 Results
Net Income $739 million (-47.5% YoY)
Earnings Per Share (EPS) $2.63 per share
Adjusted EPS $7.51 per share
Total Revenue $63.7 billion (vs. $59.4B estimate)
Evernorth Unit Revenue $52.64 billion (+36%)
Adjusted Full-Year EPS Target At least $28.40 per share
Medical Cost Ratio (MCR) 81.7% – 82.5% (trending higher)

This quarter’s performance, alongside Cigna’s strategic moves with biosimilars and pharmacy benefit management, sets a strong foundation for 2025, as noted by J.P. Morgan analyst Lisa Gill, who sees a solid setup going into the fourth quarter and beyond.


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1 Comment

  1. As on Dec 31, 2022 Cigna is Huge!

    178 million+ customer relationships

    172,000+ behavioral health providers treating children/adolescents

    2 million+ relationships with health care providers, clinics, and facilities

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