Cigna Group's shares surged intraday following the announcement that the health insurer will not pursue a merger with Humana and is well positioned to achieve its earnings targets for the year. The company stated that potential acquisitions must be 'strategically aligned, financially attractive, and have a high probability to close.' As a result, Cigna's shares saw a 7.6% increase during Monday's trading session, while Humana's shares declined by 4.3%.
Humana has yet to respond to inquiries regarding this development. In recent reports, it was noted that Cigna had restarted merger discussions with Humana after negotiations collapsed late last year. Over the upcoming weeks, Cigna is set to engage with investors and analysts, reaffirming its adjusted earnings guidance of at least $28.40 per share for the current year, with expectations for adjusted EPS growth of at least 10% by 2025.
Analysts from Capital IQ project normalized EPS figures of $28.51 for 2024 and $31.58 for the following year. At the end of October, Cigna revealed significant revenue growth of 30%, translating into $63.69 billion for the third quarter, alongside an adjusted EPS of $7.51 that exceeded analyst expectations.
In a show of confidence, the company disclosed a stock buyback of $6 billion this year, which included $1 billion repurchased thus far in the fourth quarter. Cigna anticipates continuing its share buyback strategy through 2025, primarily utilizing the proceeds from the upcoming sale of its Medicare business expected to finalize in the first quarter of 2025 for these repurchases..