Cigna Group (NYSE:CI) stock plunged after the company, during its third-quarter 2025 earnings call, said it expects margin pressure within the pharmacy benefit services segment over the next two years.
- CI stock is showing notable weakness. View the charts here
On Monday, Evernorth, Cigna’s health services division, announced a new rebate-free pharmacy benefit model designed to lower costs and improve transparency.
Cigna Healthcare will adopt this model for its fully insured lives beginning in 2027. It will become the standard model available for all Evernorth pharmacy benefits clients beginning in 2028.
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“Given the significant financial and affordability pressures for partners operating heavily in government programs, we have proactively improved the economic terms of the contracts for the benefit of these long-term strategic clients,” the company said during the earnings call on Thursday.
The healthcare company reported third-quarter 2025 revenue of $69.74 billion, beating analyst estimates of $67.11 billion.
Third-quarter revenues increased 10% year over year, primarily driven by Evernorth Health Services, which includes growth in existing client relationships and strong specialty pharmacy growth.
The company reported adjusted earnings of $7.83 per share, beating analysts’ estimates of $7.65.
Adjusted income from operations decreased 1% to $2.09 billion, primarily driven by lower contributions from Cigna Healthcare, partially offset by growth in Specialty & Care Services.
Evernorth Health Services reported third-quarter sales of $60.39 billion, up 15%. Pharmacy Benefit Services sales reached $34.09 billion, and Specialty and Care Services sales reached $26.3 billion.
Cigna Healthcare segment sales decreased 18% to $10.76 billion, primarily reflecting the impact of the Health Care Services Corporation (HCSC) transaction.
Excluding the impact of the HCSC transaction, quarterly revenues would have increased 6%, primarily driven by premium rate increases to cover expected increases in medical costs.
The Cigna Healthcare MCR was 84.8% compared to 82.8% a year ago.
Cigna ended the quarter with a total of 18.06 million medical customers, down from 19.05 million. The total number of customer relationships stood at 182.49 million. Excluding the impact of the HCSC transaction6, total customer relationships5 increased 2% from December 31, 2024. Total pharmacy customers were 122.5 million.
Outlook
Cigna reaffirms its fiscal 2025 adjusted income per share guidance of more than $29.60, which is lower than the consensus of $29.63.
The company expects Evernorth’s adjusted income from operations (pre-tax) of at least $7.2 billion, with at least $4.125 billion for Cigna Healthcare.
Cigna Healthcare Medical Care Ratio is expected to be between 83.2% to 84.2%.
During the earnings call, Cigna said that in Evernorth, it expects operating income to be slightly down in 2026.
The specialty and care services business is expected to grow income towards the higher end of its long-term growth target, offset by a decline in pharmacy benefit services.
CI Price Action: Cigna Group shares were down 13.35% at $259.19 at the time of publication on Thursday. The stock is trading near its 52-week low of $256.89, according to Benzinga Pro data.
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