Cigna raises profit forecast to $30.45 after Q2 beat on pharmacy strength

Cigna Group raised its 2026 profit forecast to at least $30.45 a share after second-quarter earnings beat estimates, driven by growth in its pharmacy and specialty drug businesses.

"By harnessing technology, data and AI to deliver more personalized experiences, improve access and lower costs, we are creating greater value every day," Brian Evanko, who took over as chief executive officer July 1, said in the earnings release.

Adjusted earnings of $7.78 a share topped the $7.60 consensus, while revenue rose 7% to $71.67 billion, exceeding the $70.34 billion average estimate. The medical loss ratio — the percentage of premiums spent on medical care — widened to 84.5% from 83.2% a year earlier, in line with the 84.46% analysts expected. The prior-year quarter benefited from higher risk-adjustment payments that compensate insurers covering a disproportionate share of sicker members.

The higher guidance reflects Cigna's pivot away from government-backed insurance toward its core employer-sponsored health plans and pharmacy benefits management. The company completed its exit from Medicare Advantage last year, selling the business to Health Care Service Corp., and plans to stop offering Affordable Care Act individual plans by the end of 2026. The strategy reduces exposure to the elevated medical costs that have weighed on rivals such as Humana, which reported a medical cost ratio above 90% in its recent quarter.

Revenue at Evernorth Health Services, which houses the pharmacy benefit manager and specialty pharmacy, rose 6% to $61.47 billion, boosted by higher use of specialty drugs for complex conditions including cancer, multiple sclerosis and rheumatoid arthritis. Pharmacy benefit managers negotiate drug prices and coverage with manufacturers on behalf of employers and health plan clients, a business model that has drawn increased regulatory scrutiny.

Net income rose to $1.66 billion, or $6.29 a share, from $1.53 billion, or $5.71 a share, a year earlier, "primarily reflecting growth in Cigna Healthcare," the company said. The new forecast of at least $30.45 a share for 2026 compares with the $30.41 analysts expect and the prior guidance of $30.35.

The shift away from government programs positions Cigna differently from peers still grappling with elevated utilization in Medicare Advantage and Medicaid. While Cigna's medical cost ratio rose in the quarter, it remained well below the 90% or higher levels reported by some rivals, reflecting its heavier weighting toward commercial plans where cost trends have been more manageable.

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