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Columbus, Indiana-based Cummins Inc. (CMI) designs, manufactures, distributes, and services diesel and natural gas engines, electric and hybrid powertrains, and related components worldwide. Valued at $69.2 billion by market cap, the company offers products to original equipment manufacturers (OEMs), distributors, and dealers through a network of company-owned and independent distributor facilities.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and CMI perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the specialty industrial machinery industry. CMI’s brand is known for quality and reliability, with a vast service network of 19,000+ dealers in 190 countries. Strong relationships with top manufacturers add to its reputation.
Despite its notable strength, CMI shares touched their 52-week high of $508.37 in the last trading session. Over the past three months, CMI stock gained 29.5%, outperforming the Industrial Select Sector SPDR Fund’s (XLI) 2.9% gains during the same time frame.
In the longer term, shares of CMI rose 56.5% on a six-month basis and climbed 35.2% over the past 52 weeks, notably outperforming XLI’s six-month gains of 7.3% and 8.6% returns over the last year.
To confirm the bullish trend, CMI is trading above its 50-day moving average since mid-May, with minor fluctuations. The stock has been trading above its 200-day moving average since early July.
CMI shares are up due to strong demand for Power Systems and Distribution, especially for data centers and generators, coupled with effective cost management. Its "Destination Zero" push into green hydrogen and hybrid powertrains through its Accelera business is also exciting investors.
On Nov. 6, CMI shares closed up more than 5% after reporting its Q3 results. Its EPS came in at $3.86, down 34.1% year over year. The company’s revenue was $8.3 billion, topping Wall Street's $8.1 billion forecast.
CMI’s rival, Illinois Tool Works Inc. (ITW) shares significantly lagged behind the stock, with a 2% uptick on a six-month basis and 9.4% losses over the past 52 weeks.
Wall Street analysts are reasonably bullish on CMI’s prospects. The stock has a consensus “Moderate Buy” rating from the 20 analysts covering it, and the mean price target of $520.06 suggests a potential upside of 2.4% from current price levels.
