Cigna Stock Has Gained Since Investor Day. Earnings Are Next. — Barrons.com

What happened

Cigna shares have gained nearly 11% since the company’s Sept. 30 investor day, versus a 0.23% rise for the S&P 500. Investors are focused on specialty and care services as Cigna changes the revenue model for its pharmacy benefits business. Cigna expects specialty to provide more than 40% of total earnings by 2030, up from about 37% this year.

Confirmed

Global impact / market context

Specialty care treats complex conditions and uses drugs that often cost more and require intensive treatment. If this business grows as Cigna expects, it could become a larger source of earnings, making the company’s ability to expand services and manage pharmacy benefits revenue important to investors.

Analyst inference

Cigna’s shares have outperformed the S&P 500 since its investor day, but its third-quarter report is the next test. Analysts polled by FactSet expect adjusted earnings per share of $7.52, compared with $7.83 a year earlier; the article does not provide the reported result.

Confirmed

What to watch

1. Cigna’s Thursday third-quarter report and adjusted earnings per share, with the FactSet estimate at $7.52 versus $7.83 in the same quarter last year. Confirmed
2. Any update on the pharmacy benefits revenue model could clarify how Cigna plans to change revenue from that large business, though no details are provided here. Analyst inference
3. Watch whether Cigna’s specialty business progresses toward its stated goal of more than 40% of total earnings by 2030, compared with about 37% this year. Confirmed

Evidence

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