Goldman Sachs’ Stocks With Highest Consensus Returns: 42 Stocks With The Highest Consensus ROE

34. The Cigna Group (NYSE:CI)

Consensus ROE: 7%

Number of Hedge Fund Investors in Q2 2024: 66

The Cigna Group (NYSE:CI) is one of the biggest insurance companies in America. The firm operates primarily through pharmacy and health insurance benefits management. Within these, pharmacy is the dominant entity on The Cigna Group (NYSE:CI)’s income statement. This is because during H1 2024, $87.1 billion out of its $117.7 billion in revenue, or 74%, were from this business line. Consequently, The Cigna Group (NYSE:CI) has to ensure that it continues to manage high volumes through pharmacies, as its network of 62,000 outlets means that lowering volumes can erode economies of scale and increase costs. The firm is aware of this, and it has diversified its pharmacy business to include high growth and nascent industries such as specialty pharmacies. These pharmacies are key in today’s rapidly evolving healthcare industry as not only do new medicines such as sickle cell treatments provide The Cigna Group (NYSE:CI) with the potential to ship high value drugs, but generics of weight loss drugs carry the potential for high volume medicine flow through its network.

The Cigna Group (NYSE:CI)’s commented on the specialty business during the Q2 2024 earnings call:

“In Accredo, our specialty business, our growth continues to be fueled by secular tailwinds as well as Accredo’s differentiated strength which makes us the market leader in the space. Biosimilars, for example, represent a force of change and a substantial opportunity for continued growth and impact. At the end of June, we began dispensing our interchangeable biosimilar for Humira. Our program has zero dollar out-of-pocket cost for patients, saving them on average $3,500 per year. To deliver these savings, we have agreements in place with multiple manufacturers that will produce biosimilars for Evernorth pharmaceutical distributor, Quallent Pharmaceuticals. Now the biosimilar opportunity goes well beyond Humira. By 2030, we expect an additional $100 million of annual specialty drug spend in the U.S. will be subject to biosimilar and generic competition.

And Accredo is well positioned to deliver differentiated value for our clients, customers and patients.”