Cigna Raises 2026 EPS Guidance as Healthcare Profit Offsets Evernorth Weakness

The Cigna Group (CI) increased its full-year 2026 adjusted earnings guidance after third-quarter results showed stronger profitability in Cigna Healthcare offsetting a lower contribution from Evernorth Health Services. The company now expects adjusted earnings per share of at least $30.60, up $0.15 from its previous guidance.

For the three months ended Sept. 30, adjusted revenue rose 6% year over year to $73.8 billion, driven by premium growth in Cigna Healthcare and drug mix in Evernorth. Consolidated adjusted income from operations was broadly unchanged at $2.10 billion, while adjusted EPS increased 2% to $7.98 from $7.83.

On a GAAP basis, shareholders’ net income was $1.44 billion, or $5.47 per diluted share, compared with $1.87 billion, or $6.98 per share, a year earlier. Adjustments in the latest quarter included acquired-intangible amortization, net investment losses, strategic optimization costs and litigation-related charges.

The adjusted selling, general and administrative expense ratio increased 10 basis points to 4.7%, reflecting investments intended to support long-term growth, partly offset by operating efficiencies. Year-to-date operating cash flow was $3.28 billion, compared with $3.45 billion in the prior-year period. Management said it continues to expect strong fourth-quarter cash generation, consistent with previous commentary and historical patterns.

The debt-to-capitalization ratio improved to 41.8% from 44.9% a year earlier and 43.0% at the end of 2025. Cigna said it remains on track to reach its long-term target of about 40% by the end of 2026.

Cigna Healthcare leads profit growth

Cigna Healthcare adjusted revenue increased 9% to $11.71 billion, while pre-tax adjusted income from operations rose 15% to $1.19 billion. The segment’s pre-tax margin expanded 50 basis points to 10.2%, primarily reflecting higher net investment income and improved operating efficiency.

The medical care ratio was 85.0%, up 20 basis points from a year earlier and consistent with the company’s expectations. Cigna described underlying medical cost trends as elevated but stable during the quarter.

Total medical customers increased 2% to 18.5 million. The Select market remained a key source of membership growth, with medical customers in that business rising 6%.

Following the quarterly performance, Cigna increased its 2026 guidance for Cigna Healthcare’s pre-tax adjusted income from operations by $50 million to at least $4.6 billion. It also narrowed its expected medical care ratio to 84.2%, plus or minus 25 basis points, from the previous range of 83.7% to 84.7%.

Evernorth pharmacy benefit profit declines

Evernorth adjusted revenue grew 6% to $63.77 billion, but pre-tax adjusted income from operations declined 4% to $1.83 billion. Its pre-tax margin decreased 30 basis points to 2.9%.

Within Evernorth, Pharmacy Benefit Services revenue rose 9% to $37.28 billion, while pre-tax adjusted income fell 22% to $765 million. Cigna attributed the decline primarily to previously discussed large-client contract renewals and strategic investments.

The company said the 2027 selling season remains strong, with retention in the high-90% range and more than 250 new clients representing over 2 million lives expected to be added.

Specialty and Care Services provided a partial offset. Revenue increased 1% to $26.50 billion, and pre-tax adjusted income rose 15% to $1.06 billion, supported by organic growth in specialty businesses and increased adoption of generics and biosimilars. Biosimilar penetration for Humira and Stelara, along with penetration of new specialty generics, reached about 90% among eligible members.

Cigna reaffirmed its 2026 guidance for Evernorth pre-tax adjusted income from operations of at least $6.9 billion.

2027 growth framework and strategic priorities

For 2027, management continues to expect adjusted EPS growth of at least 10% from a run-rate earnings baseline of at least $30 for its ongoing businesses. The baseline excludes about $0.60 per share of 2026 contribution associated with the company’s exit from the Affordable Care Act exchange business, including stranded overhead and runoff costs.

Cigna identified continued stop-loss margin improvement, a strong selling season across Evernorth and Cigna Healthcare, and benefits from its Accelerate to One modernization and productivity initiative as potential tailwinds. Expected headwinds include the ACA exchange exit, compression in industry rebate pools, lower employer coverage of GLP-1 drugs for weight loss, and a more limited pipeline of biosimilar and specialty-generic launches.

At its 2026 Investor Day, the company introduced its Lead to One strategy and set long-term targets including a 10% to 14% adjusted EPS compound annual growth rate and approximately $50 billion of cumulative operating cash flow through 2030. It also announced Accelerate to One, a multiyear modernization and productivity program with a planned scope of $3 billion.

Cigna’s outlook remains subject to medical-cost pressure, drug-pricing and rebate changes, client retention, competitive conditions, regulatory developments and the execution of its productivity initiatives. Other identified uncertainties include litigation, cybersecurity and data risks, strategic transactions, economic conditions and the company’s ability to manage debt and deploy capital as planned.