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Cummins Inc. (CMI), with a market cap of $41.9 billion, is a leading global designer, manufacturer, and distributor of diesel and natural gas engines, as well as powertrain components like fuel systems, turbochargers, and transmissions. Headquartered in Columbus, Indiana, the company serves original equipment manufacturers (OEMs), distributors, and dealers through a network of company-owned and independent facilities.
Shares of this diesel and natural gas engine manufacturer have outperformed the broader market over the past 52 weeks. CMI has gained 31.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 26.1%. In 2024, shares of Cummins are up 27.8%, compared to SPX's 17.2% gains on a YTD basis.
Zooming in further, CMI has surpassed the S&P 500 Industrial Sector SPDR’s (XLI) 20.3% returns over the past 52 weeks and 13.3% on a YTD basis.
Cummins' solid price momentum stems from strong demand for its products across various markets. Moreover, the company's commitment to delivering innovative technologies has enhanced its product offerings and positioned it favorably within the industry.
On Aug. 1, CMI stock popped 4.9% following the release of its Q2 earnings report. Significant growth in its Power Systems segment helped Cummins achieve record quarterly sales and profitability. It generated a profit of $726 million, or $5.26 per share, exceeding Wall Street's expectation of $4.85 per share. The company’s revenue of $8.8 billion surpassed forecasts of $8.28 billion from analysts.
For the fiscal year ending in December, analysts expect Cummins’s EPS to plunge marginally year over year to $19.66. The company's earnings surprise history is mixed. It beat the consensus forecast in two of the past four quarters while missing on two other occasions.
Among the 15 analysts covering the stock, the consensus rating is a “Hold.” That’s based on three “Strong Buy” ratings, one “Moderate Buy,” nine “Holds,” one “Moderate Sell,” and one “Strong Sell.”
This configuration is less bullish than two months ago when four analysts gave the stock a “Strong Buy.”
On Aug. 19, Evercore Inc. (EVR) analyst David Raso maintained an “In-Line” rating on Cummins and raised the price target from $290 to $294.
The mean price target of $317.38 suggests a 3.7% premium from CMI's current price levels. The Street-high target of $365 represents an impressive upside potential of 19.3%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
