Best Insurance Stocks today - Cigna insurance stocks performance 2013 : Health insurer Cigna Corp said that it expects 2013 earnings growth of 4 to 9 percent, below its average long-term forecasts as it confronts U.S. unemployment in the high-single digits, limited wage growth and a gradual rise in the use of medical services.
Cigna's outlook followed up on comments earlier this month from its executives about the "headwinds" expected in the coming year, as the company prepares for more aspects of U.S. healthcare reform to take hold.
The Patient Protection and Affordable Care Act, passed in 2010, includes a variety of changes and regulations that affect insurers, many of which will kick in by 2014.
Cigna President David Cordani said he does not expect the adoption of health exchanges among individuals and small companies in the next two years to hurt Cigna because it does not have a lot of those groups among its customers.
Chief Financial Officer Ralph Nicoletti told investors and analysts at a meeting on Friday that it expects total revenue will likely rise to a range of $31.5 billion to $32.5 billion next year. That is above analyst expectations of $29.3 billion revenue in 2013.
Revenue will grow across the company and its international business, which includes operations in Turkey and India, would increase the most at more than 20 percent.
Earnings per share will rise to a range of $5.80 to $6.25, excluding items, he said. Analysts were forecasting earnings of $6.32 per share ahead of the meeting. It was not immediately clear if those two figures were on the same basis.
Cigna is in a strong position to see growth in its international and commercial healthcare coverage, according to BMO Capital, a financial services company that provides clients from businesses and government’s access to a wide variety of services and products. BMO believes that some of the most important parts of the health insurance providers business are also strengthening.
Furthermore, the company’s stock prices are also projected to increase, as analyst Dave Shove increased his 12-month anticipation for the price of the company’s stock from USD $60 to $65.
Earlier this month at its annual investor day presentation, Cigna Corp released their projections for 2013, with adjusted earnings of about USD $5.80 to $6.25 per share. These figures are lower and more conservative than average expectations from other analysts, which set expectations at about USD $6.33 on average, according to FactSet, a multinational financial data and software company.
Many reasons for the optimistic outlooks relate to Cigna’s strong portfolio of product offerings when compared to competitors. The company has a strong presence in the United States, which Shove says will remain a core aspect of the company’s focus. However, their overseas business is also growing through the sales of individual insurance and expatriate policies that offer coverage to people who live outside their home countries.
In addition to the company’s overseas potential, operating expenses overseas are also decreasing, making it easier for Cigna to continue expanding internationally.
Goldman Sachs analyst Matthew Borsch wrote in a research note that the company was conservative in its estimates for 2013. He also decreased his projection for a 12-month price target by USD $2 to $56 and Cigna’s forecast was also below Leerink Swann analyst, Jason Gurda’s estimate of $6.30 per share.
“We came away (from Friday’s presentation) increasingly confident in the company’s diversified growth drivers and ability to successfully navigate the industry changes that are scheduled to occur over the next couple years,” he wrote.
Positive results for Cigna then, 2013 will hopefully go as expected and offer promise to its policyholders in the new year.
Cigna stock prices prediction 2013
: * Says sees 2013 adjusted EPS $5.80 to $6.25
* Says sees 2013 revs $31.5 billion to $32.5 billion
* Thomson Reuters I/B/E/S FY 2013 earnings per share view $6.32, revenue view $29.28 billion.
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