Cigna Group (CI, Financial) shares surged today by 7.82% following the company's announcement that it is not pursuing a merger with competitor Humana. This news relieved investors who had been concerned about the potential complexities of such a merger.
With the current stock price at $344.78, Cigna (CI, Financial) has a market capitalization of approximately $95.9 billion. The company's strong upward movement echoes its strategic decision to remain independent and focus on acquisitions that are strategically aligned, financially attractive, and offer a high probability of closing, according to its recently reiterated M&A criteria.
Cigna has also reaffirmed its robust outlook for 2024, projecting a full-year consolidated adjusted operating income of at least $28.40 per share. It anticipates a 10% increase in adjusted earnings per share (EPS) in 2025. This optimistic projection is coupled with significant shareholder value enhancement through $6 billion in share repurchases completed earlier this year, with ongoing plans to continue buybacks into 2025.
From a valuation standpoint, Cigna (CI, Financial) is assessed as "Modestly Undervalued" with a GF Value of $402.87, reflecting potential for substantial appreciation. Investors can review the company's GF Value for more information.
It's worth noting some cautionary indicators, such as a price-to-earnings (PE) ratio of 32.53 being close to its 10-year high of 33.05, as well as a low tax rate that may not be sustainable. However, the stock's dividend yield is nearing a 10-year high, and its price-to-sales (PS) ratio is close to a 3-year low, signaling potential opportunities for value-seeking investors.
Overall, Cigna (CI, Financial) continues to make strategic moves to strengthen its core operations and offer value to its shareholders, indicating a positive outlook for the company's financial health and future performance.
