Cigna Increases Share Buyback Capacity to $10 Billion

Cigna Corporation (NYSE: CI) revealed that its board of directors has approved to increase the share repurchase authorization by about $6 billion, taking the total buyback capacity to about $10 billion.

The global health service company seeks to buyback more than $7 billion worth of shares in 2022, as its equity is trading at an attractive and compelling valuation. Further, it does not want to undergo any large-scale mergers or acquisitions.

Cigna also expects to generate over $12 billion of deployable capital in 2022, including $5.4 billion in after-tax proceeds from the previously announced sale of its international life, accident, and supplemental benefits businesses in seven countries.

Apart from this, Cigna continues to invest for its long-term growth. The company intends to make an additional $450 million of investment into Cigna Ventures to maximize impact across three key areas — insights and analytics, digital health and experience, and care delivery and enablement.

The Chairman and CEO of Cigna, David M. Cordani, said, “Our plans for significant share repurchase coupled with our recently increased dividend, reinforces the confidence we have in our long-term growth plans and the underlying earnings power of Cigna’s business portfolio. This reflects continued and effective capital deployment for shareholders.”

“Beyond our expectation to allocate a significant portion of deployable capital for share repurchase this year, our strong capital position and cash flow continues to give us financial flexibility and optionality for strategic investments and targeted bolt-on acquisitions,” said, Brian Evanko, the Chief Financial Officer at Cigna.

Price Target

Last week, Leerink Partners analyst Whit Mayo maintained a Hold rating on Cigna with a price target of $245, implying 5.2% upside potential from current level.

Based on 6 Buys and 7 Holds, the stock has a Moderate Buy consensus rating. The Cigna stock price prediction of $254.85 implies 9.5% upside potential from current levels. Shares have gained 10.3% over the past year.

News Sentiment

News Sentiment for Cigna is Very Positive based on 16 articles over the past seven days. All the articles have Bullish sentiment, compared to a sector average of 57%, and none have Bearish Sentiment, compared to a sector average of 43%.

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