Shares of Cigna Group ($CI) experienced an upward momentum intraday after the health insurer confirmed it is not pursuing a merger with Humana ($HUM) and is on track to fulfill its full-year earnings targets. In a statement released on Monday, Cigna indicated that it would only consider acquisitions that are "strategically aligned, financially attractive, and have a high probability to close." The response from the market was visible, as shares of Cigna rallied by 7.6% during Monday's trading session, while Humana's shares fell by 4.3%.
Humana did not provide a comment to MT Newswires regarding this development. It was reported last month by Bloomberg News that Cigna had resumed discussions regarding a potential merger with Humana after negotiations had previously fallen through late last year. Looking ahead, Cigna plans to engage in discussions with investors and analysts in the upcoming weeks.
During these meetings, the company aims to reaffirm its adjusted earnings guidance, projecting at least $28.40 per share for the current year along with a projected adjusted EPS growth of at least 10% by 2025. Analysts at Capital IQ have estimated a normalized EPS of $28.51 for 2024 and $31.58 for the following year. At the conclusion of October, Cigna reported an impressive revenue growth of 30%, reaching $63.69 billion for the third quarter, coupled with an adjusted EPS of $7.51, both figures surpassing analysts' predictions. Further highlighting its commitment to returning capital to shareholders, Cigna announced its stock buyback of $6 billion this year, which includes $1 billion executed in the fourth quarter alone.
The company anticipates continuing this stock repurchase strategy into 2025. Additionally, Cigna intends to allocate a significant portion of the proceeds from the sale of its Medicare business, scheduled to close in the first quarter of 2025, towards funding these share buybacks..