Cigna’s shares plummeted on Thursday, dropping 8.4% as of 1:20 p.m. ET, with losses reaching 11.3% earlier in the day. The decline comes despite the company reporting a revenue increase of $65.65 billion, beating Wall Street’s estimate of $63.44 for its Q4 period.
However, the numbers were not as strong as expected. Cigna missed earnings-per-share (EPS) estimates, with shares falling to $6.64 per share compared to $7.82 predicted by analysts. The company’s medical cost ratio also rose to 87.9%, higher than the expected 84.7%.
In response to these challenges, Cigna CEO David Cordani announced plans to take corrective action to address near-term pressures and advance its long-term growth strategy. He noted that it would take two years to recover margins compacted by rising costs.
The company’s guidance for 2025 now forecasts $29.50 in EPS, down from the expected $31.50 per share. Despite this, Cigna’s board of directors increased the quarterly dividend by 8% and authorized a $6 billion increase in share repurchasing.
For investors considering buying Cigna stock, it is worth noting that The Motley Fool’s Stock Advisor analyst team did not identify the company as one of their top picks. Instead, they highlighted other stocks that could produce significant returns.
Source: https://finance.yahoo.com/news/why-cigna-stock-plummeting-today-194615348.html