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By Manojna Maddipatla
(Reuters) - U.S. health insurer Cigna Corp on Friday raised its full-year profit and revenue targets after first-quarter profit topped estimates, as it bet on its health services unit that includes its pharmacy benefits management business, to drive growth.
Cigna's shares were up over 1% before the bell and its forecast raise follows rivals UnitedHealth and Anthem Inc that last month increased their adjusted profit targets for the year.
For 2021, Cigna said it expects adjusted earnings per share from operations of at least $20.20, up from $20 forecast earlier.
It now sees adjusted revenue of at least $166 billion, up from its earlier forecast of at least $165 billion.
"While the EPS outlook was raised moderately, we see this as prudent since the health insurers still face important unknowns at this point around how quickly health care utilization will further recover in 2021," Stephens analyst Scott Fidel said.
Health insurers have been facing several challenges due to the COVID-19 pandemic, including direct costs related to testing, treatment and vaccinations as well as higher disenrollment in employer-sponsored plans due to the pandemic's economic impact.
Demand for non-COVID-19 healthcare services, which were deferred last year, is also expected to rebound as more people get vaccinated and feel safe to return to doctors' offices, potentially driving up health insurers' costs.
Cigna reiterated that it anticipates a negative earnings impact of about $1.25 per share this year from COVID-19.
However, Cigna's health services unit, which was rebranded last September to Evernorth, has shown resilient growth in the last few quarters.
For a graphic on Cigna's Evernorth unit spearheads growth:
Evernorth's adjusted revenue rose nearly 13% from a year earlier.
Excluding items, Cigna earned $4.73 per share in the first-quarter, beating analysts' estimates of $4.38, according to Refinitiv IBES data.
(Reporting by Manojna Maddipatla in Bengaluru; Editing by Vinay Dwivedi)