Cummins (CMI) Upgraded by Zacks Investment Research to Buy
Zacks Investment Research upgraded shares of Cummins (NYSE:CMI) from a hold rating to a buy rating in a research report sent to investors on Thursday morning. They currently have $171.00 target price on the stock.
According to Zacks, “Cummins’ revenue is aided by improved demand for trucks, construction and power generation equipment. Further, increased engines and components demand for heavy and medium-duty trucks in North America, along with improved demand for light-duty truck market in China and India, will drive Cummins’ financials in 2018. The company also focuses on introducing innovative products and strategies — including partnerships. Cummins is focused on enhancing the shareholder value by pursuing aggressive share repurchases and increasing dividend payouts. The company raised its aim of returning cash inflow from operations to 75% from the initial plan of 50%.”
A number of other equities research analysts have also weighed in on the stock. ValuEngine raised shares of Cummins from a strong sell rating to a sell rating in a report on Thursday, November 8th. UBS Group set a $130.00 price objective on shares of Cummins and gave the company a sell rating in a research note on Tuesday, November 6th. Mizuho set a $145.00 price objective on shares of Cummins and gave the company a hold rating in a research note on Wednesday, October 31st. Morgan Stanley reduced their price objective on shares of Cummins from $165.00 to $151.00 and set a hold rating on the stock in a research note on Wednesday, October 31st. Finally, Credit Suisse Group reduced their price objective on shares of Cummins from $177.00 to $168.00 and set an outperform rating on the stock in a research note on Wednesday, October 31st. Two equities research analysts have rated the stock with a sell rating, thirteen have assigned a hold rating and eight have issued a buy rating to the stock. Cummins has a consensus rating of Hold and an average price target of $163.16.
Cummins (NYSE:CMI) last posted its earnings results on Tuesday, October 30th. The company reported $4.05 earnings per share for the quarter, topping the Zacks’ consensus estimate of $3.76 by $0.29. Cummins had a net margin of 5.57% and a return on equity of 29.17%. The firm had revenue of $5.94 billion for the quarter, compared to analyst estimates of $5.96 billion. During the same period in the previous year, the firm posted $2.71 EPS. The company’s revenue for the quarter was up 12.5% compared to the same quarter last year. As a group, equities research analysts predict that Cummins will post 15.34 EPS for the current year.
Cummins declared that its board has initiated a share buyback plan on Tuesday, October 9th that authorizes the company to buyback $2.00 billion in outstanding shares. This buyback authorization authorizes the company to buy up to 8.3% of its stock through open market purchases. Stock buyback plans are often a sign that the company’s leadership believes its shares are undervalued.
The business also recently announced a quarterly dividend, which was paid on Monday, December 3rd. Investors of record on Thursday, November 15th were given a dividend of $1.14 per share. The ex-dividend date of this dividend was Wednesday, November 14th. This represents a $4.56 dividend on an annualized basis and a dividend yield of 3.26%. Cummins’s payout ratio is presently 42.94%.
In other Cummins news, insider Tony Satterthwaite sold 830 shares of the company’s stock in a transaction on Monday, November 5th. The shares were sold at an average price of $141.61, for a total transaction of $117,536.30. Following the transaction, the insider now owns 40,371 shares in the company, valued at $5,716,937.31. The transaction was disclosed in a filing with the SEC, which is accessible through this link. Also, CAO Marya M. Rose sold 10,970 shares of the company’s stock in a transaction on Monday, December 3rd. The stock was sold at an average price of $155.00, for a total transaction of $1,700,350.00. Following the transaction, the chief accounting officer now owns 26,035 shares in the company, valued at approximately $4,035,425. The disclosure for this sale can be found here. Insiders have sold a total of 41,541 shares of company stock worth $6,302,659 in the last quarter. 0.62% of the stock is owned by corporate insiders.
A number of institutional investors and hedge funds have recently added to or reduced their stakes in the business. Acropolis Investment Management LLC raised its holdings in Cummins by 6.9% during the third quarter. Acropolis Investment Management LLC now owns 5,302 shares of the company’s stock worth $774,000 after buying an additional 340 shares during the last quarter. Mackenzie Financial Corp raised its holdings in Cummins by 1.6% during the third quarter. Mackenzie Financial Corp now owns 22,009 shares of the company’s stock worth $3,215,000 after buying an additional 353 shares during the last quarter. Security National Bank of SO Dak raised its holdings in Cummins by 7.2% during the second quarter. Security National Bank of SO Dak now owns 5,372 shares of the company’s stock worth $714,000 after buying an additional 360 shares during the last quarter. BRYN MAWR TRUST Co raised its holdings in Cummins by 4.1% during the second quarter. BRYN MAWR TRUST Co now owns 9,410 shares of the company’s stock worth $1,252,000 after buying an additional 369 shares during the last quarter. Finally, Commerce Bank raised its holdings in Cummins by 2.4% during the third quarter. Commerce Bank now owns 16,408 shares of the company’s stock worth $2,397,000 after buying an additional 385 shares during the last quarter. Hedge funds and other institutional investors own 80.72% of the company’s stock.
Cummins Company Profile
Cummins Inc designs, manufactures, distributes, and services diesel and natural gas engines, and engine-related component products worldwide. It operates through four segments: Engine, Distribution, Components, and Power Systems segments. The Engine segment manufactures and markets a range of diesel and natural gas powered engines under the Cummins and other customer brands for the heavy-and medium-duty truck, bus, recreational vehicle, light-duty automotive, construction, mining, marine, rail, oil and gas, defense, and agricultural markets.
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