Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

On Jul 5, 2013, shares of CIGNA Corp. (CI - Analyst Report) hit a 52-week high of $73.95. The momentum was driven by the company’s favorable operating results over the past many quarters, a differentiated growth strategy and the strength of its diverse portfolio of businesses are other factors.
 
Cigna is uniquely poised for long term growth given its exposure to strong growth areas, relative protection from healthcare reform and diversification into a number of products.
 
Cigna is performing well in its business segments. In commercial health care, the company has continuously grown its target markets by achieving strong customer retention, expanding its existing customer relationships and adding new customers.
 
In the Global Supplemental Benefits business, Cigna delivered a healthy increase in revenue and earnings, reflecting solid customer growth, effective cost management and contributions from recent acquisitions.
 
We also view Cigna's more significant International exposure favorably and see the company as having lower direct exposure to key health reform risks given its limited exposure to the Commercial market.
 
Cigna is also poised for significant earnings accretion in 2013 from its recent acquisition of HealthSpring as well as a strategic decision on its captive pharmacy Benefits Management business.
 
Additionally we are impressed with the company’s recent transaction to exit from the Run-Off Reinsurance segment. This step will reduce the company’s future earnings volatility.
 
Cigna has also been delivering positive earnings surprise for past many quarters. For the second quarter the Zacks Consensus Estimate for EPS stands at $1.59, reflecting 4.6% year over year increase. The long term earnings growth is expected to be 11.3%.  
 
Valuation for Cigna looks reasonable. The shares are trading in-line with the peer group average on a forward price-to-earnings basis and at premium on a price-to-book basis with return on equity higher than the peer group average. The 1-year return from the stock came in at 73.8%, much above the S&P’s return of 20.5%.
 
Cigna carries a Zacks Rank #2 (Buy). Multi-line insurers Assured Guaranty Ltd. (AGO - Snapshot Report), Hartford Financial Services Group Inc.  (HIG - Analyst Report), FBL Financial Group Inc. (FFG - Snapshot Report) all carry Zacks Rank #2 (Buy) and are worth considering.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%