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Cigna (CI) to Post Q1 Earnings: Will It Deliver a Beat?

Zacks Equity Research
·4 min read

Cigna Corporation CI is set to report first-quarter 2021 results on May 7, before the opening bell.

In the fourth quarter of 2020, the company’s earnings of $3.51 per share missed the Zacks Consensus Estimate by 4.1% and also declined 18.6% year over year. Results suffered escalated COVID-related costs.

Factors to Note

Strong performances across its Evernorth, U.S. Medical and International Markets businesses are likely to have contributed to the March-quarter’s revenues.

Delving deeper into the company’s segments, the Evernorth unit, which was rebranded in September 2020, might have gained momentum from a growing customer base and higher pharmacy scripts volumes in the to-be-reported quarter. Revenues are likely to have been driven by the insourcing of U.S. Medical pharmacy volumes and strong organic growth including strength in retail network and a progress in specialty pharmacy services.

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The U.S. Medical business is likely to have benefited on the back of customer growth across the company’s Select segment and Medicare Advantage business, and a rise in premiums and return of the health insurance tax. However, continuity in pandemic-related costs and persistent dislocation across the broader labor market inducing slightly higher commercial disenrollment might have weighed on the company’s first-quarter performance.

The International Markets business revenues are likely to have shown consistent growth. Operating earnings might have taken a hit from steep costs incurred to support customers and employees, and heavy investments made in the business to boost prospects.

Numerous cost-curbing initiatives might have offset the company’s SG&A expenses to some extent in the to-be-reported quarter.

Q1 Estimates

The Zacks Consensus Estimate for the company’s earnings is pegged at $4.42 per share, indicating a decline of 5.76% from the year-ago quarter’s reported figure.

The consensus mark for revenues stands at $40.58 billion, indicating rise of 5.71% from the prior-year quarter’s reported number.

Earnings Surprise History

The company boasts a stellar earnings surprise track. Its bottom line surpassed estimates in three of the trailing four quarters (missed the mark in one), the average surprise being 5.09%. This is depicted in the chart below:

Cigna Corporation Price and EPS Surprise

Cigna Corporation price-eps-surprise | Cigna Corporation Quote

What Our Quantitative Model Predicts

Our proven model predicts an earnings beat for Cigna this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Cigna has an Earnings ESP of +1.01%. This is because the Most Accurate Estimate of $3.73 is pegged higher than the Zacks Consensus Estimate of $3.66. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Cigna carries a Zacks Rank #3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Some other stocks worth considering from the healthcare space with a perfect mix of elements to surpass estimates in the upcoming quarterly releases are as follows:

Adamas Pharmaceuticals, Inc. ADMS has an Earnings ESP of +1.26% and a Zacks Rank of 3, currently.

Kodiak Sciences Inc. KOD has an Earnings ESP of +28.31% and is presently Zacks #3 Ranked.

Catalyst Biosciences, Inc. CBIO has an Earnings ESP of +13.64% and is a #3 Ranked player at present.

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Cigna Corporation (CI) : Free Stock Analysis Report

Adamas Pharmaceuticals, Inc. (ADMS) : Free Stock Analysis Report

Catalyst Biosciences, Inc. (CBIO) : Free Stock Analysis Report

Kodiak Sciences Inc. (KOD) : Free Stock Analysis Report

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Zacks Investment Research