We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Time to Buy Cigna (CI) or Humana's (HUM) Stock on News of a Potential Merger?
Read MoreHide Full Article
News of a potential mega-merger between Cigna (CI - Free Report) ) and Humana (HUM - Free Report) ) made headlines in today’s trading session.
As the two largest health insurers in the U.S., the merger would create a dominant alliance and investors may be wondering if now is a good time to buy stock in these health giants.
Performance Overview
As they stand alone, Cigna and Humana both have a dominant share of the medical insurance plan market offering HMOs, PPOs, and Private Fee-For-Service (PFFS) plans. Talks of a potential merger via a stock and cash deal saw Cigna’s stock fall -8% on Wednesday while Humana shares fell -5%.
However, the deal could create a revenue pipeline that would be rivaled by few mergers or acquisitions in any industry and Cigna’s stock is up +26% over the last three years while Humana shares have risen +20% with both near the S&P 500’s performance and topping the Nasdaq’s +17%.
More impressive is that over the last decade, Humana’s stock has soared +364% to top the broader indexes while Cigna’s +204% has topped the benchmark’s +160% and is on the heels of the Nasdaq’s +251%.
Image Source: Zacks Investment Research
Growth & Outlook
The top and bottom line expansion of Humana and Cigna has been remarkable and is why a potential merger could be very enticing for investors. Notably, both stocks have an “A” Zacks Style Scores grade for Growth.
To that point, Cigna’s annual earnings are now expected to rise 6% in fiscal 2023 and jump another 14% in FY24 to $28.23 per share. On the top line, sales are projected to be up 7% this year and climb another 18% in FY24 to $227.64 billion.
Image Source: Zacks Investment Research
Pivoting to Humana, annual earnings are forecasted to jump 12% in FY23 and climb another 11% in FY24 at $31.42 per share. Total sales are expected to rise 10% in FY23 and expand another 9% next year to $111.94 billion.
Image Source: Zacks Investment Research
Bottom Line
Given their attractive outlooks, a potential Cigna and Humana merger would be very compelling for longer-term investors. For now, both stocks land a Zacks Rank #3 (Hold) as better buying opportunities could be ahead but their growth and expansion is hard to overlook even without a potential merger.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Time to Buy Cigna (CI) or Humana's (HUM) Stock on News of a Potential Merger?
News of a potential mega-merger between Cigna (CI - Free Report) ) and Humana (HUM - Free Report) ) made headlines in today’s trading session.
As the two largest health insurers in the U.S., the merger would create a dominant alliance and investors may be wondering if now is a good time to buy stock in these health giants.
Performance Overview
As they stand alone, Cigna and Humana both have a dominant share of the medical insurance plan market offering HMOs, PPOs, and Private Fee-For-Service (PFFS) plans. Talks of a potential merger via a stock and cash deal saw Cigna’s stock fall -8% on Wednesday while Humana shares fell -5%.
However, the deal could create a revenue pipeline that would be rivaled by few mergers or acquisitions in any industry and Cigna’s stock is up +26% over the last three years while Humana shares have risen +20% with both near the S&P 500’s performance and topping the Nasdaq’s +17%.
More impressive is that over the last decade, Humana’s stock has soared +364% to top the broader indexes while Cigna’s +204% has topped the benchmark’s +160% and is on the heels of the Nasdaq’s +251%.
Image Source: Zacks Investment Research
Growth & Outlook
The top and bottom line expansion of Humana and Cigna has been remarkable and is why a potential merger could be very enticing for investors. Notably, both stocks have an “A” Zacks Style Scores grade for Growth.
To that point, Cigna’s annual earnings are now expected to rise 6% in fiscal 2023 and jump another 14% in FY24 to $28.23 per share. On the top line, sales are projected to be up 7% this year and climb another 18% in FY24 to $227.64 billion.
Image Source: Zacks Investment Research
Pivoting to Humana, annual earnings are forecasted to jump 12% in FY23 and climb another 11% in FY24 at $31.42 per share. Total sales are expected to rise 10% in FY23 and expand another 9% next year to $111.94 billion.
Image Source: Zacks Investment Research
Bottom Line
Given their attractive outlooks, a potential Cigna and Humana merger would be very compelling for longer-term investors. For now, both stocks land a Zacks Rank #3 (Hold) as better buying opportunities could be ahead but their growth and expansion is hard to overlook even without a potential merger.