Cigna Denies Humana Merger Talks, Reaffirms Earnings Outlook & Share Buyback Plans
In a statement released on Monday, Cigna Group (CI) confirmed that it is not pursuing a merger with Humana Inc. (HUM), putting an end to recent speculation regarding a potential deal. The company emphasized its commitment to its established merger and acquisition criteria, stating it would only consider acquisitions that align strategically, are financially attractive, and have a high likelihood of success.
Despite the denied merger talks, Cigna remains confident in its financial performance and has reaffirmed its projected full-year 2024 consolidated adjusted earnings per share (EPS) outlook of at least $28.40. The company also expects to achieve at least 10% growth in EPS for 2025.
Cigna’s strong financial performance was evident in its recent third-quarter results. The company reported sales of $63.7 billion, exceeding analysts’ expectations. Adjusted income from operations increased by 5%, driven by strong contributions from Evernorth Health Services, particularly within Specialty and Care Services. This growth was partially offset by lower net investment income.
In addition to reaffirming its financial outlook, Cigna outlined its plans for continued share repurchases. The company has already repurchased $6 billion of stock year-to-date, including $1 billion in the fourth quarter. Cigna intends to continue actively repurchasing its shares throughout the fourth quarter and into 2025.
The company plans to utilize a significant portion of the proceeds from the sale of its Medicare businesses, expected to close in the first quarter of 2025, for share repurchases. Cigna currently has $5.3 billion remaining on its share repurchase authorization.
The news of Cigna’s denial of merger talks and reaffirmation of its financial outlook has sent its stock price up 7.89% in premarket trading on Monday. Conversely, Humana’s stock price has declined by 6.29% during the same period.
This announcement sheds light on Cigna’s strategic priorities and its commitment to delivering shareholder value through disciplined capital deployment. The company’s focus on organic growth, strategic acquisitions, and share repurchases positions it for continued success in the healthcare industry.
