Leerink analyst Ana Gupte sees an acquisition of WellCare (WCG) or Molina Healthcare (MOH) by Cigna (CI) as potentially likely if the Anthem (ANTM) deal breaks. A Cigna combination with WellCare or Molina can be "strategically attractive" given the entry for Cigna into Medicaid and particularly Dual Eligibles markets, the analyst tells investors in a research note. While Gupte does not expect either company to entertain a transaction in the near-term, she believes a deal could be possible at the right price. The analyst recently lowered her Anthem-Cigna deal probability from 70% to under 50% on antitrust challenges exacerbated by management conflicts. She has an Outperform rating and $155 price target on Cigna's shares.

The company states: "The consolidated MCR for the first quarter of 2024 was 88.5%, reflecting changes in member mix due to growth across all segments and continued, strong medical cost management, and is in line with the Company's expectation. The Medicaid MCR for the first quarter of 2024 was 89.7%, in line with the Company's expectation and normal quarter to quarter trend fluctuations within our guidance. The new store additions in California and Nebraska, as well as Iowa and the My Choice Wisconsin acquisition in late-2023, drove a higher reported MCR in the first quarter of 2024. The Medicare MCR for the first quarter of 2024 was 88.7%, in line with the Company's expectations. Utilization in the legacy portfolio was consistent with the second half of 2023, but was offset by operational improvements and benefit adjustments."

Reports Q1 revenue $9.93B, consensus $9.44B. "We are very pleased with our first quarter performance," said Joseph Zubretsky, CEO. "We delivered strong financial performance supported by excellent operating metrics across our business, while sustaining profitable growth consistent with our long-term targets."

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