Zacks Investment Research upgraded shares of Cummins (NYSE:CMI) from a hold rating to a buy rating in a report published on Friday. The firm currently has $165.00 price target on the stock.
According to Zacks, “In third-quarter 2018, Cummins’ adjusted earnings beat the Zacks Consensus Estimate while revenues missed. However, compared with the year-ago quarter, both figures witnessed rise. The rise was due to 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. Moreover, Cummins raised its aim of returning cash inflow from operations to 75% from the initial plan of 50%. However, rising tariff-related costs will pressurize Cummins profit margin. Also, lower sales of medium and heavy-duty trucks in China, dependence on a single supplier are other concerns.”
Several other analysts also recently issued reports on CMI. Bank of America upped their price target on Cummins from $154.00 to $157.00 and gave the stock a neutral rating in a research note on Wednesday, August 1st. Oppenheimer decreased their target price on Cummins from $168.00 to $192.00 and set an outperform rating for the company in a research note on Monday, July 23rd. Mizuho set a $145.00 target price on Cummins and gave the company a hold rating in a research note on Wednesday, October 31st. UBS Group set a $130.00 target price on Cummins and gave the company a sell rating in a research note on Tuesday, November 6th. Finally, ValuEngine upgraded Cummins from a strong sell rating to a sell rating in a research note on Thursday, November 8th. Two research analysts have rated the stock with a sell rating, fourteen have given a hold rating and eight have issued a buy rating to the company’s stock. The stock currently has a consensus rating of Hold and an average price target of $163.70.
Cummins (NYSE:CMI) last released its quarterly earnings results on Tuesday, October 30th. The company reported $4.05 earnings per share (EPS) for the quarter, topping the consensus estimate of $3.76 by $0.29. The company had revenue of $5.94 billion during the quarter, compared to the consensus estimate of $5.96 billion. Cummins had a return on equity of 29.17% and a net margin of 5.57%. The firm’s revenue was up 12.5% on a year-over-year basis. During the same quarter in the prior year, the company posted $2.71 EPS. On average, equities research analysts forecast that Cummins will post 15.34 earnings per share for the current year.
Cummins announced that its Board of Directors has approved a share buyback program on Tuesday, October 9th that permits the company to repurchase $2.00 billion in shares. This repurchase authorization permits the company to buy up to 8.3% of its stock through open market purchases. Stock repurchase programs are generally a sign that the company’s management believes its shares are undervalued.
The company also recently disclosed a quarterly dividend, which will be paid on Monday, December 3rd. Shareholders of record on Thursday, November 15th will be given a $1.14 dividend. The ex-dividend date is Wednesday, November 14th. This represents a $4.56 dividend on an annualized basis and a dividend yield of 3.10%. Cummins’s dividend payout ratio is currently 42.94%.
In other Cummins news, VP Mark Andrew Smith sold 501 shares of the firm’s stock in a transaction that occurred on Tuesday, October 9th. The stock was sold at an average price of $153.27, for a total value of $76,788.27. Following the completion of the sale, the vice president now owns 4,463 shares in the company, valued at approximately $684,044.01. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, Director Franklin R. Changdiaz sold 595 shares of the firm’s stock in a transaction that occurred on Thursday, November 15th. The stock was sold at an average price of $147.86, for a total value of $87,976.70. Following the completion of the sale, the director now owns 6,157 shares of the company’s stock, valued at approximately $910,374.02. The disclosure for this sale can be found here. Insiders sold a total of 27,090 shares of company stock valued at $4,062,754 in the last quarter. Corporate insiders own 0.67% of the company’s stock.
Several hedge funds have recently made changes to their positions in the business. Acropolis Investment Management LLC raised its holdings in shares of Cummins by 6.9% in the 3rd quarter. Acropolis Investment Management LLC now owns 5,302 shares of the company’s stock worth $774,000 after buying an additional 340 shares in the last quarter. Mackenzie Financial Corp raised its holdings in shares of Cummins by 1.6% in the 3rd quarter. Mackenzie Financial Corp now owns 22,009 shares of the company’s stock worth $3,215,000 after buying an additional 353 shares in the last quarter. Security National Bank of SO Dak raised its holdings in shares of Cummins by 7.2% in the 2nd 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 in the last quarter. BRYN MAWR TRUST Co raised its holdings in shares of Cummins by 4.1% in the 2nd 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 in the last quarter. Finally, Commerce Bank raised its holdings in shares of Cummins by 2.4% in the 3rd quarter. Commerce Bank now owns 16,408 shares of the company’s stock worth $2,397,000 after buying an additional 385 shares in the last quarter. Institutional investors own 82.51% of the company’s stock.
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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