Cigna has a stock buyback program in place, allowing the company to repurchase its own shares on the open market. This program aims to increase shareholder value by reducing the number of outstanding shares.
Cigna's stock buyback program was announced in 2018, with an initial authorization of $10 billion. This authorization has been increased over time, with the most recent increase being to $10.5 billion in 2020.
The stock buyback program is managed by Cigna's board of directors, who have the discretion to determine the timing and amount of share repurchases. The program is funded from Cigna's operating cash flows and available borrowings.
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Cigna Stock Buyback Announcements
Cigna's Chairman and Chief Executive Officer, David M. Cordani, has emphasized the company's commitment to returning value to shareholders through share repurchases.
The company has announced an accelerated stock repurchase program for $3.2 billion, which will result in an initial delivery of approximately 7.6 million shares on February 15, 2024.
Cigna plans to repurchase at least $5 billion of common stock by the end of the first half of 2024, with a portion executed via an accelerated share repurchase program in the first quarter of 2024.
The company's total share repurchase authority has been increased by $10 billion, bringing it to $11.3 billion, and will be used to repurchase shares at prevailing market prices or through other legally permissible means.
Cigna intends to use the majority of its discretionary cash flow for share repurchase in 2024, with the goal of achieving long-term annual adjusted EPS growth of 10-13% while maintaining an attractive dividend.
The accelerated share repurchase program will be settled in the second quarter of 2024, and the company may be entitled to receive additional shares or make a cash payment at final settlement, depending on market conditions.
Cigna's Board of Directors has reaffirmed its previously provided outlook of full-year 2023 consolidated adjusted income from operations on a per share basis of at least $24.75 per share, and targets consolidated adjusted income from operations on a per share basis of at least $28 for full-year 2024.
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Frequently Asked Questions
What happens to my shares in a buyback?
When a company repurchases its own stock, the total number of shares outstanding decreases, leaving more value for each remaining investor. Your shares become more valuable, but the company's ownership structure remains the same.
Did Cigna Group announce any repurchase program in 2024?
Yes, Cigna Group announced a $3.2 billion accelerated stock repurchase in February 2024. This move aims to return value to shareholders and demonstrates the company's commitment to its financial strategy.
What will be the share price after buyback?
Share price may increase after a buyback due to reduced supply, but the actual price change depends on various market factors
Sources
- https://www.cnbc.com/2023/12/10/cigna-reportedly-abandons-pursuit-of-humana-plans-10-billion-share-buyback-sources-say.html
- https://www.prnewswire.com/news-releases/the-cigna-group-announces-3-2-billion-accelerated-stock-repurchase-302062476.html
- https://www.prnewswire.com/news-releases/the-cigna-group-announces-significant-increase-to-share-repurchase-program-of-10-billion-302010753.html
- https://www.forbes.com/sites/brucejapsen/2023/12/10/cigna-opts-for-10-billion-share-buyback-instead-of-humana-merger/
- https://healthcareuncovered.substack.com/p/cigna-healthcare-said-it-will-buy
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