Updated: Strong Performance in Healthcare Services Drives Cigna to Raise Annual Profit Forecast

Added stock price information in the second paragraph, CEO comments in the third paragraph, analyst commentary and conference call details in the ninth and tenth paragraphs

Sneha S K/Kunal Das

Reuters, November 5 - Cigna Group (Cigna, CI.N) raised its annual profit forecast on Thursday after reporting third-quarter results that beat market expectations, benefiting from growth in its specialty pharmacy and health services businesses.

The company also said it expects adjusted profit to grow at least 10% by 2027. Boosted by this, its share price rose 2.4% in early trading.

"We have a clear strategic growth framework designed to create long-term value and will continue to execute rigorously," CEO Brian Evanko said, adding that the company is encouraged by its progress in coordinating care for patients with complex health needs.

Evernorth Health Services (which includes Cigna’s pharmacy benefits, specialty pharmacy, and care services businesses) reported third-quarter adjusted revenue of $63.77 billion, up about 6% from a year earlier.

In September, the company announced a new plan aiming to achieve about $3 billion in cost savings by 2030 (link). The plan will focus on leveraging AI-driven insights and tools to streamline workflows.

Cigna also reduced its risk exposure to high-cost government-sponsored plans and shifted its focus to its core traditional employer-sponsored healthcare and pharmacy benefits management operations.

The company exited the Medicare Advantage business last year and said it would end coverage in the Affordable Care Act plans by the end of 2026.

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The company said that despite several challenges—including impacts from exiting the Obamacare market, reduced drug rebates, lower employer reimbursement rates for weight-loss drugs, and fewer launches of lower-cost specialty drugs—it expects customer growth and margin improvement in certain employer-sponsored plans next year.

Morningstar analyst Julie Utterback said that the costs associated with Cigna transitioning its pharmacy benefits business to a fee-based model were mostly concentrated this year, which could help accelerate profit growth in 2027.

The company said it is actively shifting contracts with pharmaceutical manufacturers and network pharmacies from the rebate model to a fee-based model.

Due to changes in U.S. employer insurance business, the medical loss ratio (the proportion of premiums spent on patient care) rose to 85% in the third quarter from 84.8% a year earlier.

According to data compiled by LSEG, analysts previously estimated the medical cost ratio at 85.18%.

Cigna now expects adjusted earnings per share of at least $30.60 in 2026, up 15 cents from its previous forecast and above analysts’ estimate of $30.51.

The company's quarterly adjusted revenue was $73.79 billion, exceeding analysts’ expectation of $72.72 billion; adjusted earnings per share of $7.98 also beat the market expectation of $7.50.

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