Cigna Not Pursuing Humana Merger, Stock Soars

On Monday, Cigna Group CI said its officials are expected to participate in meetings with investors and analysts over the next several weeks.

Additionally, in light of recent and persistent speculation, Cigna confirmed that it is not pursuing a combination with Humana Inc. HUM.

“The Cigna Group remains committed to its established M&A criteria and would only consider acquisitions that are strategically aligned, financially attractive, and have a high probability to close,” the company added.

During these meetings, Cigna expects to reaffirm its projected full-year 2024 consolidated adjusted EPS outlook of at least $28.40 per share and growth of at least 10% in 2025.

In October, the company reported third-quarter sales of $63.7 billion, up 30% year-over-year, beating the consensus of $59.35 billion.

Adjusted income from operations for the third quarter of 2024 increased by 5%, reflecting strong contributions from Evernorth Health Services, particularly within Specialty and Care Services, partially offset by lower net investment income.

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Last month, a Bloomberg report noted that Cigna had reinitiated discussions to merge with Humana. The deal could expand Cigna’s footprint in Medicare Advantage alongside its commercial insurance prowess while leveraging Humana’s strong Medicare segment.

Last year, both companies faced challenges as they navigated federal pressures to reduce Medicare costs, severely impacting Humana’s market performance and valuation.

Cigna said it continues to deliver shareholder value through focused execution against stated operational and financial targets and via disciplined capital deployment, including dividends and share repurchases.

Year-to-date, the company has repurchased $6 billion of stock, including $1 billion thus far in the fourth quarter.

Cigna expects to continue actively repurchasing its shares in the fourth quarter and 2025.

It will use the majority of proceeds from the sale of its Medicare businesses, which is expected to close in the first quarter of 2025, for share repurchase and has $5.3 billion remaining on its share repurchase authorization. 

Price Action: CI stock is up 7.89% at $345, and HUM stock is down 6.29% during the premarket session at last check Monday.

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