Cigna (CI) shares ended the last trading session 6.3% higher at $282.41. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 17.7% loss over the past four weeks.
Cigna’s recent price movement stems from recovering investor confidence in the prospects of the company after an overreaction by investors to the new resolution targeting pharmacy benefit managers. These provisions were initially feared to impose stringent regulations on the healthcare sector. However, the changes are anticipated to be less severe, and the core business outlook for Cigna remains robust, fueling investor confidence.
The company expects the 2024 EPS to be at least $28.40, which indicates growth of 13.2% from the 2023 reported figure. Strong Evernorth Health Services and Cigna Healthcare segments are expected to buoy Cigna’s results and price performance. However, ongoing monitoring of broader market conditions and regulatory changes will be crucial to determining whether further significant stock gains are possible.
This health insurer is expected to post quarterly earnings of $7.84 per share in its upcoming report, which represents a year-over-year change of +15.5%. Revenues are expected to be $62.88 billion, up 22.9% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Cigna, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on CI going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Cigna is part of the Zacks Medical - HMOs industry. Molina (MOH), another stock in the same industry, closed the last trading session 1.7% higher at $296.59. MOH has returned 3.3% in the past month.
For Molina
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
