Cigna’s fourth quarter results were well received by the market, reflecting the company’s ability to navigate industry disruptions and deliver on key growth priorities. Management credited the quarter’s performance to robust expansion in its EverNorth specialty and care services, successful adoption of biosimilars, and operational discipline across its health benefits business. CEO David Cordani highlighted the company’s strategic investments, including the new pharmacy benefits model and expanded specialty offerings, noting, "We further expanded our specialty capabilities to serve hospitals and health systems, in part with our new investment in Shields Health Solutions." Cordani also emphasized Cigna’s focus on improving affordability and customer experience, particularly through initiatives like the Clarity solution and ongoing efforts to enhance digital engagement.
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Cigna (CI) Q4 CY2025 Highlights:
- Revenue: $72.5 billion vs analyst estimates of $69.86 billion (10.4% year-on-year growth, 3.8% beat)
- Adjusted EPS: $8.08 vs analyst estimates of $7.88 (2.5% beat)
- Adjusted EBITDA: $2.99 billion vs analyst estimates of $3.31 billion (4.1% margin, 9.7% miss)
- Adjusted EPS guidance for the upcoming financial year 2026 is $30.25 at the midpoint, in line with analyst estimates
- Operating Margin: 3.2%, in line with the same quarter last year
- Customers: 16.42 million, up from 16.35 million in the previous quarter
- Market Capitalization: $78.73 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Cigna’s Q4 Earnings Call
- Lisa Gill (JPMorgan): asked about the margin impact of the new pharmacy model and the relocation of the GPO to the US. CEO David Cordani said the margin profile should remain similar, and the tax impact would be manageable, estimating a maximum 1% effect.
- Scott Fidel (Goldman Sachs): inquired whether regulatory changes are now fully addressed and about client adoption of the new PBM model. Cordani and President Brian Evanko confirmed alignment with regulators and highlighted positive feedback, expecting at least 50% client adoption by 2028.
- Charles Rhyee (TD Cowen): sought clarification on Cigna’s responsibilities if clients do not adopt the new PBM model. Cordani explained that while the new model will be the standard offering, Cigna will continue to offer choice and is not liable if adoption rates vary.
- Kevin Fischbeck (Bank of America): questioned why medical cost ratio (MCR) improvements are limited despite pricing actions. CFO Ann Dennison noted one-time items in 2025 and continued elevated cost assumptions, emphasizing prudence in projections.
- Erin Wright (Morgan Stanley): asked about drivers of specialty growth and biosimilar penetration. Evanko pointed to strong demand in inflammatory, asthma, and allergy categories, and highlighted that biosimilars like Humira now make up the vast majority of eligible scripts.
Catalysts in Upcoming Quarters
In the coming quarters, our team will monitor (1) the pace and breadth of client adoption for Cigna’s new rebate-free pharmacy benefits model, (2) the impact of specialty pharmacy and biosimilar uptake on EverNorth’s earnings trajectory, and (3) the effectiveness of cost management initiatives in a persistently high-cost healthcare environment. The rollout and operationalization of digital tools and new strategic partnerships will also be important indicators of execution.
Cigna currently trades at $292.70, up from $271.71 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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