Cigna Corporation (CI) | Investment Case

1. Company Snapshot

1.a. Company Description

Cigna Corporation provides insurance and related products and services in the United States.Its Evernorth segment provides a range of coordinated and point solution health services, including pharmacy, benefits management, care delivery and management, and intelligence solutions to health plans, employers, government organizations, and health care providers.The company's Cigna Healthcare segment offers medical, pharmacy, behavioral health, dental, vision, health advocacy programs, and other products and services for insured and self-insured customers; Medicare Advantage, Medicare Supplement, and Medicare Part D plans for seniors, as well as individual health insurance plans to on and off the public exchanges; and health care coverage in its international markets, as well as health care benefits for mobile individuals and employees of multinational organizations.

The company also offers permanent insurance contracts sold to corporations to provide coverage on the lives of certain employees for financing employer-paid future benefit obligations.It distributes its products and services through insurance brokers and consultants; directly to employers, unions and other groups, or individuals; and private and public exchanges.The company was founded in 1792 and is headquartered in Bloomfield, Connecticut.

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1.b. Last Insights on CI

Cigna Corporation's recent performance was negatively impacted by concerns over margin pressure in its pharmacy-benefit services division. The company warned of a decline in profit margins in this segment over the next two years, sparking investor worries. Despite strong Q3 results and robust revenue growth, Cigna's valuation remains depressed. However, recent PBM model changes and specialty pharmacy expansion support long-term growth. Additionally, the company has been engaging in share buybacks, which can boost EPS growth and shareholder returns. (Source: Cigna Group: Market Overreacts To PBM Risk, Buy The Dip)

1.c. Company Highlights

Last Price	280.31
Change Percentage	-1.96%
Open	285.4
Previous Close	285.92
Market Cap ( Millions)	74878
Volume	1943665
Year High	350
Year Low	239.51
M A 50	278.1
M A 200	292.32

FCF Yield	9.93%
Dividend Yield	2.15%
ROE	14.59%
Debt / Equity	81.43%
Net Debt / EBIDTA	230.27%
Price To Book	1.78
Price Earnings Ratio	12.51
Price To FCF	10.07
Price To sales	0.27
EV / EBITDA	8.46

2. Cigna Group's Strong 2025 Performance and 2026 Outlook

Cigna Group delivered a robust full-year 2025 adjusted revenue of $275 billion, representing an 11% increase, and adjusted earnings per share of $29.84, a 9% increase. The company's adjusted EPS came out at $8.08, beating estimates of $7.88. The strong performance was driven by growth across its businesses, including EverNorth and Cigna Healthcare. The company's adjusted revenues are expected to grow by 6.1% next year, according to analysts' estimates.

Publication Date: Feb -06

                                    📋 Highlights
                                    2025 Revenue & EPS Growth::
                                                Cigna reported full-year adjusted revenue of $275 billion (11% YoY) and adjusted EPS of $29.84 (9% YoY).
2026 EPS Outlook::
                                                Adjusted EPS expected to reach at least $30.25, with consolidated revenues targeting $280 billion.
EverNorth Performance::
                                                Q4 revenue hit $63.1 billion, pretax adjusted earnings of $2.2 billion, driven by pharmacy innovation and specialty business growth (14% YoY).
Rebate-Free Pharmacy Model::
                                                Full adoption in Cigna Healthcare by 2027, with 50% of EverNorth expected to adopt by 2028, lowering patient costs via price assurance technology.
Cash Flow & Shareholder Returns::
                                                2025 cash flow from operations was $9.6 billion; $3.6 billion in share repurchases and $1.6 billion in dividends returned to shareholders.

                                

Segment Performance

EverNorth marked another year of growth, with the introduction of an industry-leading innovation in pharmacy benefit services. Fourth quarter revenues grew to $63.1 billion, and pretax adjusted earnings grew to $2.2 billion, in line with expectations. Cigna Healthcare delivered strong results above original expectations, with adjusted revenues of $11.2 billion and pretax adjusted earnings of $734 million in the fourth quarter.

Outlook and Guidance

Cigna expects full-year 2026 consolidated adjusted revenues of approximately $280 billion and adjusted income from operations of at least $30.25 per share. The company is confident in its ability to drive industry transformation and improve healthcare for its customers and clients. As David Cordani stated, "We believe our innovation squarely goes in the direction of improving affordability and predictability, harnessing transparency, and expanding value for the consumers along with the clients."

Valuation and Dividend Yield

With a Price-to-Book Ratio of 1.81 and a Dividend Yield of 2.12%, Cigna's valuation appears reasonable. The company's Return on Equity (ROE) of 14.59% is also impressive, indicating efficient use of shareholder capital. The Net Debt / EBITDA ratio of 2.83 suggests a manageable debt burden.

Cash Flow Expectations

Cigna expects to deliver approximately $9 billion of cash flow from operations in 2026, a decline from $9.6 billion in 2025. Ann Dennison discussed Cigna's cash flow expectations, stating that they are pleased with the $9.6 billion for this year and expect higher cash flow in the second half of next year.

3. NewsRoom

Bruni J V & Co. Co. Has $20.16 Million Stake in Cigna Group $CI

Feb -22

Source: defenseworld.net

Cigna Group $CI Shares Bought by CenterBook Partners LP

Feb -21

Source: defenseworld.net

Compass Wealth Management LLC Makes New $4.72 Million Investment in Cigna Group $CI

Feb -20

Source: defenseworld.net

2,380 Shares in Cigna Group $CI Acquired by First National Bank of Omaha

Feb -20

Source: defenseworld.net

Alberta Investment Management Corp Takes Position in Cigna Group $CI

Feb -20

Source: defenseworld.net

Cigna Group (NYSE:CI) Receives Average Rating of “Moderate Buy” from Brokerages

Feb -17

Source: defenseworld.net

Evernorth Health Services Teams Up with Direct Relief To Deliver Critical Medications to Communities Impacted by Disasters

Feb -12

Source: prnewswire.com

Caprock Group LLC Makes New $4.12 Million Investment in Cigna Group $CI

Feb -12

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.60%)

6. Segments

Evernorth Health Services

Expected Growth: 5.0%

Evernorth Health Services is expected to grow at a rate higher than the global revenue growth hypothesis due to its diversified revenue streams, strong client relationships, and the growing demand for healthcare services. The segment's pharmacy benefit management and specialty pharmacy businesses are particularly well-positioned to benefit from the increasing demand for healthcare services.

Cigna Healthcare

Expected Growth: 4.8%

Cigna Healthcare is expected to grow at a rate slightly higher than the global revenue growth hypothesis due to its diverse range of products and services, strong presence in the global health insurance market, and the growing demand for health insurance. The segment's Medicare Advantage and individual insurance businesses are particularly well-positioned to benefit from the increasing demand for health insurance.

Other Operations

Expected Growth: 3.5%

Other Operations is expected to grow at a rate lower than the global revenue growth hypothesis due to its diverse range of businesses and products, some of which may be subject to market volatility. However, the segment's life insurance and disability businesses are still expected to contribute to the company's revenue and profitability.

Corporate and Eliminations

Expected Growth: 0.0%

Corporate and Eliminations is not expected to grow as it is not a business segment and does not generate revenue. The segment is primarily used to eliminate intercompany transactions and to record corporate expenses.

7. Detailed Products

Individual and Family Plans

Cigna's individual and family plans offer flexible and affordable health insurance options for individuals and families who are not covered by an employer-sponsored plan.

Group Health Insurance

Cigna's group health insurance plans provide employers with customizable health insurance options for their employees, including medical, dental, and vision coverage.

Medicare Advantage Plans

Cigna's Medicare Advantage plans offer seniors and individuals with disabilities a range of health insurance options that combine Medicare Parts A and B with additional benefits.

Medicare Supplement Insurance

Cigna's Medicare Supplement insurance plans help fill the gaps in Original Medicare coverage, providing additional financial protection and peace of mind.

Dental Insurance

Cigna's dental insurance plans provide individuals and families with access to a network of dentists and coverage for routine cleanings, fillings, and other dental services.

Vision Insurance

Cigna's vision insurance plans offer individuals and families coverage for eye exams, glasses, and contact lenses, as well as discounts on LASIK and other vision services.

Life Insurance

Cigna's life insurance plans provide individuals and families with financial protection in the event of a loved one's passing, helping to cover final expenses and ensure a secure future.

Accident Insurance

Cigna's accident insurance plans provide individuals and families with financial protection in the event of an unexpected accident, helping to cover medical expenses and lost income.

Critical Illness Insurance

Cigna's critical illness insurance plans provide individuals and families with financial protection in the event of a serious illness, such as cancer, heart attack, or stroke.

Expatriate Health Insurance

Cigna's expatriate health insurance plans provide individuals and families living abroad with access to a network of healthcare providers and facilities worldwide.

8. Cigna Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Cigna Corporation operates in the health insurance industry, where substitutes are limited. However, with the increasing popularity of telemedicine and online health services, there is a growing threat of substitutes. Nevertheless, the complexity and regulatory requirements of the health insurance industry make it difficult for new substitutes to emerge, hence a medium score.

Bargaining Power Of Customers

Cigna Corporation's customers are largely individuals and employers who purchase health insurance plans. While customers have some bargaining power, the complexity of health insurance plans and the lack of transparency in the industry limit their ability to negotiate prices or switch providers easily, resulting in a low score.

Bargaining Power Of Suppliers

Cigna Corporation relies on a network of healthcare providers, including hospitals, doctors, and other medical professionals. While these suppliers have some bargaining power, Cigna's large size and market presence give it significant negotiating power, resulting in a medium score.

Threat Of New Entrants

The health insurance industry is heavily regulated, and new entrants face significant barriers to entry, including high capital requirements, complex regulatory requirements, and the need to establish a network of healthcare providers. These barriers limit the threat of new entrants, resulting in a low score.

Intensity Of Rivalry

The health insurance industry is highly competitive, with several large players competing for market share. Cigna Corporation faces intense competition from rivals such as UnitedHealth Group, Anthem, and Aetna, which drives down prices and increases marketing expenses, resulting in a high score.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	40.12%
Debt Cost	4.71%
Equity Weight	59.88%
Equity Cost	6.61%
WACC	5.85%
Leverage	67.00%

11. Quality Control: Cigna Corporation passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

CVS Health

A-Score: 5.6/10

Value: 5.0

Growth: 3.9

Quality: 2.6

Yield: 6.0

Momentum: 9.0

Volatility: 7.3

1-Year Total Return ->

Cigna

A-Score: 5.1/10

Value: 7.3

Growth: 6.4

Quality: 4.6

Yield: 4.0

Momentum: 1.5

Volatility: 6.7

1-Year Total Return ->

Elevance Health

A-Score: 5.0/10

Value: 6.4

Growth: 5.7

Quality: 6.8

Yield: 3.0

Momentum: 2.0

Volatility: 6.3

1-Year Total Return ->

UnitedHealth

A-Score: 4.3/10

Value: 5.3

Growth: 6.1

Quality: 5.2

Yield: 4.0

Momentum: 0.5

Volatility: 5.0

1-Year Total Return ->

Humana

A-Score: 3.9/10

Value: 5.3

Growth: 5.2

Quality: 4.1

Yield: 2.0

Momentum: 2.0

Volatility: 4.7

1-Year Total Return ->

Centene

A-Score: 3.8/10

Value: 9.5

Growth: 5.6

Quality: 3.3

Yield: 0.0

Momentum: 0.5

Volatility: 4.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-6.06%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

5.85%

Cigna Corporation - US1255231003

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CI

1.c. Company Highlights

Less Volatile

Higher Growth

Strong Momentum

Earnings Beats

Revenues Miss

Higher Yield

Revenues Beats

Earnings Miss

Better Quality

Average Growth

Stable Momentum

2. Cigna Group's Strong 2025 Performance and 2026 Outlook

Segment Performance

Outlook and Guidance

Valuation and Dividend Yield

Cash Flow Expectations

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.60%)

6. Segments

Evernorth Health Services

Expected Growth: 5.0%

Cigna Healthcare

Expected Growth: 4.8%

Other Operations

Expected Growth: 3.5%

Corporate and Eliminations

Expected Growth: 0.0%

7. Detailed Products

Individual and Family Plans

Group Health Insurance

Medicare Advantage Plans

Medicare Supplement Insurance

Dental Insurance

Vision Insurance

Life Insurance

Accident Insurance

Critical Illness Insurance

Expatriate Health Insurance

8. Cigna Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Cigna Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

280.31$

Current Price

280.31$

Potential

12.e Scoring ^Insights

12.f DCF ^BETA