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Cigna expected to see strong performance in 2013

Posted on Nov 26, 2012 by Sergio Ulloa ()

Cigna is in a strong position to see growth in its international and commercial healthcare coverage, according to BMO Capital, a financial services company that provides clients from businesses and government's access to a wide variety of services and products. BMO believes that some of the most important parts of the health insurance providers business are also strengthening. Furthermore, the company's stock prices are also projected to increase, as analyst Dave Shove increased his 12-month anticipation for the price of the company's stock from USD $60 to $65. Earlier this month at its annual investor day presentation, Cigna Corp released their projections for 2013, with adjusted earnings of about USD $5.80 to $6.25 per share. These figures are lower and more conservative than average expectations from other analysts, which set expectations at about USD $6.33 on average, according to FactSet, a multinational financial data and software company. Many reasons for the optimistic outlooks relate to Cigna's strong portfolio of product offerings when compared to competitors. The company has a strong presence in the United States, which Shove says will remain a core aspect of the company's focus. However, their overseas business is also growing through the sales of individual insurance and expatriate policies that offer coverage to people who live outside their home countries. In addition to the company's overseas potential, operating expenses overseas are also decreasing, making it easier for Cigna to continue expanding internationally. Goldman Sachs analyst Matthew Borsch wrote in a research note that the company was conservative in its estimates for 2013. He also decreased his projection for a 12-month price target by USD $2 to $56 and Cigna's forecast was also below Leerink Swann analyst, Jason Gurda's estimate of $6.30 per share. "We came away (from Friday's presentation) increasingly confident in the company's diversified growth drivers and ability to successfully navigate the industry changes that are scheduled to occur over the next couple years," he wrote. Positive results for Cigna then, 2013 will hopefully go as expected and offer promise to its policyholders in the new year.
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