Cigna Group (The)

Strong Revenue Growth but Earnings Miss: Cigna Group reported a full-year revenue growth of 27%, reaching approximately $247 billion. However, adjusted earnings per share (EPS) of $27.33 increased only 9% year-over-year, falling short of expectations primarily due to higher medical costs in their stop-loss insurance product.

Challenges in the Stop-Loss Segment: The fourth quarter's results were negatively impacted by a significant rise in high-cost claimants related to specialty medications and surgical activities. This led to a 87.9% medical care ratio in Q4, which was higher than expected. The company anticipates a higher medical care ratio for the stop-loss segment in 2025, with a margin recovery expected to occur gradually over the next two years.

Earnings Forecast for 2025: Looking forward, Cigna Group expects consolidated adjusted revenues of at least $252 billion and adjusted income from operations of at least $7.9 billion, translating to a minimum EPS of $29.50 for 2025. The forecast reflects approximately $150 million in investment costs aimed at improving customer and patient experiences.