The health insurance industry has received a lot of backlash for its managed care practices, which plague providers with prior authorizations and rampant denials of medical claims. The rise in medical benefit ratios (MBRs) driven by Medicare Advantage plans has squeezed profits at major health insurance providers such as Humana Inc. New York Stock Exchange: HUM, UnitedHealth Group Inc. New York Stock Exchange: UNGAnd CVS Health Company. New York Stock Exchange: CVS. However, one major insurance company quickly saw the writing on the wall and sold its Medicare Advantage business to protect its profits.
Cigna Inc. Group of Companies New York Stock Exchange: is at the top of the health insurance food chain. The company has demonstrated its foresight and flexibility to quickly navigate the changing healthcare landscape in the medical sector.
How Cigna Masterfully Navigates Healthcare Trends
Cigna Group today
Signa Group
As of 3:57 pm ET
- 52 week range
- $262.03
▼
$370.83
- Dividend yield
- 2.00%
- P/E ratio
- 26.36
- Target price
- $395.93
Cigna has skillfully maneuvered and maneuvered its way into the healthcare industry, staying ahead of its time and avoiding obstacles along the way. In 2011, they launched their Medicare Advantage (MA) program by acquiring HealthSpring Inc. for $3.8 billion to increase MA membership from 46,000 to 400,000 members.
For over a decade, Cigna made billions from MA until their spidey senses kicked in. They saw the writing on the wall and left when inpatient utilization began to rise, selling their Medicare Advantage business (along with Medicare Part D and Cigna supplemental benefits). business) for $3.3 billion to Health Care Service Corporation (a large nonprofit insurance company offering Blue Cross Blue Shield plans) in January 2024. That is why rumors about the acquisition of Cigna began. Humana didn’t make sense since they would be re-entering the MA market they had just exited.
Cigna entered the lucrative pharmacy benefit management (PBM) business by acquiring Express Scripts for $67 billion in December 2018. In doing so, it also acquired EviCore, a third-party medical benefit management (MBM) and utilization firm. Insurance companies often outsource EviCore to use intellipath’s data analytics and artificial intelligence (AI) solutions to process pre-authorization services and claims management, ensuring treatment is medically necessary. Critics suggest that EviCore is more of a way to convey waivers and shift responsibility to a “neutral” third party. They are supposedly hired to automate claim denials and extend the pre-authorization process to improve profits for its health insurance clients.
US health care spending to rise 7.5% in 2023
According to the Centers for Medicare and Medicaid Services, National Health Expenditures (NHE) data show that health care spending in the United States rose 7.5% year-over-year in 2023 to $4.9 trillion, or $14,570 per year. people, which is 17.6% of gross domestic product (GDP). . Private health insurance costs rose 11.5% year on year. NHE is projected to grow by 5.6% between 2023 and 2032, outpacing average GDP growth of 4.3%. Health care costs will continue to outpace inflation.
This ensures that healthcare is a growing industry and, figuratively speaking, Cigna may be the nicest house in a rough neighborhood.
Evernorth’s 50% revenue growth drove Cigna’s 30% year-over-year revenue growth in the third quarter of 2024.
Cigna operates through two divisions: Evernorth Health Services and Cigna Healthcare. Evernorth operates a PBM business, specialty pharmacy and care delivery and management services (EviCore). Cigna Healthcare is an insurance company that offers traditional health insurance plans. Cigna reported third-quarter earnings per share of $7.51, beating analysts’ estimates by 28 cents. Revenue rose a whopping 30% year over year to $63.7 billion, beating the consensus estimate of $59.58 billion by more than $4 billion.
Cigna’s level of care continues to be one of the highest in the industry compared to peers
Cigna Group stock forecast today
$395.93
Growth potential 41.87%Buy
Based on ratings from 15 analysts
| High forecast | $438.00 |
|---|---|
| Average forecast | $395.93 |
| Low forecast | $348.00 |
Cigna Group Stock Forecast Details
The Medical Benefit Ratio (MCR) is the percentage of premiums that are actually spent on health care for its members. The higher the MCR, the less money the insurer makes. Cigna’s medical MCR was 82.8%, up from 80.5% in the prior year, but much better than rival CVS’s MCR, which rose to 95.2% in the third quarter of 2024. Again, this illustrates how Cigna protected its MCR by selling its MA business, while CVS’s MCR share rose to 95.2% (up from 85.7% a year earlier), retaining its MA business, as well as demonstrating a capable dexterity Cigna.
CI’s average consensus price target is $395.93which implies a growth potential of 41.31%, and his highest analyst price target is at US$438. It has 13 Buy analyst ratings and one Hold recommendation. The short interest on the stock is 1.69%.
CI forms a potential ABCD reversal pattern
An ABCD reversal is a harmonic pattern consisting of four key points: swing high A, bottom reversal B, peak C, and reversal low D. A reversal is triggered when the stock moves back up through point B.
The CI formed an ABCD pattern consisting of a low and a lower low, which found support at the $273.14 Fibonacci level. The daily pegged VWAP is attempting to hold support at the $273.14 Fibonacci level as the CI attempts to trigger a market structure low (MSL) buy signal above $284.29. ABCD reversal breakout occurs above $306.66. The daily RSI is starting to bounce off the 39 band. Fibonacci (Fibonacci retracement support levels are located at $273.14, $264.76, $252.87 and $214.88.
Actionable Option Strategies: Bullish investors may consider using cash-backed puts at Fibonacci retracement support levels to buy the dip. In the case of stock assignment, writing covered calls at high Fibonacci levels implements a wheel strategy to generate income in excess of the 2.00% dividend yield.
Before you consider Cigna Group, you should hear this.
MarketBeat tracks Wall Street’s top-rated and best-performing analysts daily and the stocks they recommend to their clients. MarketBeat identified five stocks that top analysts are quietly whispering to their clients to buy now, before the broader market takes hold… and Cigna Group wasn’t on the list.
While Cigna Group currently has an analyst rating of Buy, the top-rated analysts rate these five stocks as Outperform Buys.
View five stocks here
Wondering where to start (or end) with AI stocks? These 10 common stocks can help investors build long-term wealth as artificial intelligence continues to advance in the future.
Get this free report