Cigna Group (CI) Bearish Setup: AI-Driven Options Outlook

The Cigna Group is a global health company operating through two growth platforms: 'Evernorth Health Services' and 'Cigna Healthcare'. 'Evernorth Health Services' offers independent and coordinated health solutions, including pharmacy benefit services and specialty and care services, serving managed care organizations, health insurers, third-party administrators, employers, and government health programs. 'Cigna Healthcare' provides comprehensive medical plan services and coordinated solutions through its U.S. Healthcare and International Health segments, targeting employers, groups, and individuals with administrative services only (ASO) and insurance funding solutions. The company differentiates itself by cross-enterprise leverage, using its capabilities to efficiently meet client needs, and by a focus on affordability, clinical expertise, and a culture of innovation.

The near-term outlook for Cigna (CI) is slightly negative. The primary driver is the Barclays analyst rating. While the analyst maintains an \

CI's technical outlook is bearish, evidenced by a sharp decline over the past 90 days, culminating in a recent close at $264.30. The stock price is significantly below its 50-day SMA, currently at 296.34, and 200-day SMA at 305.55, confirming a strong downtrend. Momentum indicators further support this bearish sentiment. The RSI_14 is at 34.20, indicating oversold conditions, which could lead to a short-term bounce. However, the MACD_12_26_9 at -8.13 is well below its signal line, and the MACDh_12_26_9 shows substantial negative divergence, reinforcing bearish momentum. The STOCHk_14_3_3 is at 11.38, also suggesting oversold conditions, but this alone is insufficient to reverse the prevailing downtrend. The recent bounce from a low of $239.51 to the current price may encounter resistance around the 290-300 level, where the 50-day SMA resides. Given these factors, a continuation of the downtrend is more probable over the next 1-3 months.

The Cigna Group's MD&A presents a somewhat mixed picture. For the three months ended September 30, 2025, total revenues increased 10% to $69,748 million. Shareholders' net income increased significantly, up 153% to $1,868 million, primarily due to the absence of an impairment recorded in 2024. However, adjusted income from operations only saw a marginal decrease of 1% to $2,096 million. The nine-month period shows a similar trend, with revenues up 12% to $202,428 million and shareholders' net income up 135% to $4,723 million. Pharmacy revenues increased 16% and 17% for the three and nine months ended, respectively, reflecting higher utilization of prescription drugs. Premiums decreased 21% and 10%, primarily due to the HCSC transaction. Cash flow from operating activities decreased for the nine months ended September 30, 2025, to $3,452 million from $5,151 million in the prior year, due to the absence of favorable net cash flow impacts from new clients onboarded in 2024. The company completed the sale of its Medicare Advantage business to HCSC for $4.9 billion, receiving $4.2 billion in cash proceeds at closing, with the remainder expected in Q4 2025. The company expects its transformational rebate-free model for pharmacy benefits to impact pre-tax adjusted income from operations for Evernorth Health Services over the short term.

The Cigna Group's Q2 2025 earnings call presents a moderately bullish outlook, underpinned by reaffirmed full-year guidance and strong performance in key segments. CEO David Cordani highlighted the company's delivery of '$67.2 billion in total revenue and grew adjusted earnings per share to $7.20,' noting their long-term growth algorithm of '10% to 14% compounded adjusted EPS growth.' The company reaffirmed its full year 2025 adjusted earnings per share outlook of at least $29.60, despite industry disruptions. Brian Evanko emphasized the strength of their three platforms, Cigna Healthcare, Evernorth Pharmacy Benefit Services, and Evernorth Specialty and Care Services, and their mutually reinforcing value. While Cigna Healthcare experienced elevated medical costs, particularly in the individual exchange business, this was offset by the strength of the broader portfolio. Evernorth's earnings were slightly ahead of expectations, driven by Specialty and Care Services. Overall, the tone suggests confidence in the company's ability to navigate a dynamic environment and deliver sustained growth, supported by strategic differentiators and relentless execution.

CI's financial performance presents a mixed picture. Revenue has shown a general upward trend, increasing from $51.1B in Q4 2023 to $69.7B in Q3 2025. However, gross profit margins have fluctuated, starting at 12.86% in Q4 2023, decreasing to around 10-11% for most of 2024 and 2025, and then dropping to 0% in the most recent quarter of Q3 2025. Operating cash flow has been consistently positive, with $3.4B in Q3 2025, indicating the company is generating cash from its core operations. Total debt has increased from $30.9B in Q4 2023 to $34.04B in Q3 2025, suggesting a moderate increase in leverage. Overall, while revenue growth and positive operating cash flow are encouraging, the inconsistent gross profit ratio and increasing debt warrant careful monitoring. The significant drop in gross profit in Q3 2025 is a concern that needs further investigation to determine if it is a temporary anomaly or a sign of underlying issues.

The company demonstrates a moderately bullish profile, characterized by solid revenue growth and improving profitability. Revenue has consistently increased, indicating strong market demand. The gross margin exhibits stability, suggesting effective cost management. Return on Equity (ROE) has improved, showcasing efficient capital allocation. While the Price-to-Earnings (P/E) ratio is elevated, it is potentially justified by the company's growth prospects. The Debt-to-Equity ratio has decreased, reflecting a healthier balance sheet and reduced financial risk. The current ratio is at a healthy level, implying sufficient liquidity to meet short-term obligations. Overall, the company presents a favorable combination of growth, profitability, and balance sheet strength, supporting a positive outlook for the next 12 months, although the high P/E ratio warrants close monitoring.