Today witnessed an upward surge in Cigna's stock price.
Cigna Corporation's (CI 0.77% increase) shares were climbing today, following the company's announcement that it was not pursuing a merger with competitor Humana.
By 1:15 p.m. ET, Cigna's stock price had risen by 7.7%.
Laying Humana merger speculation to rest
In a press release, Cigna explicitly stated that it had "no plans to merge with Humana." Rumors had swirled about a potential merger, and the recent presidential election had fueled speculation that a more business-friendly environment might approve such a deal.
However, Cigna's statement today confirmed that, despite widespread speculation, the company had no intentions of merging with Humana.
Cigna reiterated that it would only consider mergers that fit its established acquisition criteria, being strategically sound, financially beneficial, and with a high likelihood of closing.
Many investors were satisfied with this clarification and felt relieved that they wouldn't have to navigated a lengthy and complex approval process had a merger materialized.
Cigna's optimistic outlook
Beyond dispelling merger rumors, Cigna reaffirmed its financial outlook for 2024. It predicted that its full-year consolidated adjusted operating income would reach at least $28.40 per share, and its adjusted earnings per share (EPS) would increase by at least 10% in 2025.
Cigna also highlighted its commitment to creating value for shareholders through share repurchases. To date, the company had purchased $6 billion in shares, and it anticipated continuing its repurchase strategy in the fourth quarter and in 2025.
With rumors about a Humana merger now put to rest, Cigna investors can now concentrate on the company's projected growth for this year, instead of dwelling on the future's uncertainties.
Investors who were apprehensive about the potential complexity of a Cigna-Humana merger now have the opportunity to focus their attention on investing in Cigna's shares, given the company's announcement of no merger plans. The positive financial outlook provided by Cigna, including an expected increase in adjusted earnings per share by at least 10% in 2025, further motivates investors to consider investing in the company's finance.
