Cummins (NYSE:CMI) Sets New 1-Year High - Still a Buy?

Key Points

• Cummins reached a new 52-week high of $669.22 (last $663.58) and is trading well above the consensus price target of $600.27, with analysts' consensus rated as a "Moderate Buy" (11 Buys, 6 Holds).
• The company reported an earnings beat—EPS $5.81 vs. $5.17 and revenue $8.54B vs. $8.09B—with a 25.71% return on equity and analysts projecting FY EPS of 26.03, signaling solid recent fundamentals.
• Cummins pays a quarterly dividend of $2.00 (annualized $8.00, yield ~1.2%, payout ratio ~39%), while insiders sold roughly 31,195 shares (~$18.4M) last quarter amid high institutional ownership (~83.5%).

Cummins Inc. (NYSE:CMI - Get Free Report) reached a new 52-week high on Thursday . The company traded as high as $669.22 and last traded at $663.58, with a volume of 168038 shares changing hands. The stock had previously closed at $638.95.

Analysts Set New Price Targets

CMI has been the subject of a number of recent research reports. Wall Street Zen downgraded Cummins from a "strong-buy" rating to a "buy" rating in a report on Sunday, March 8th. Zacks Research downgraded shares of Cummins from a "strong-buy" rating to a "hold" rating in a research report on Wednesday, January 28th. Sanford C. Bernstein set a $600.00 target price on shares of Cummins and gave the company a "market perform" rating in a research report on Friday, February 6th. Barclays increased their target price on shares of Cummins from $546.00 to $610.00 and gave the company an "overweight" rating in a research report on Friday, January 23rd. Finally, JPMorgan Chase & Co. increased their target price on shares of Cummins from $485.00 to $580.00 and gave the company a "neutral" rating in a research report on Wednesday, January 14th. Eleven equities research analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the company's stock. According to MarketBeat.com, Cummins presently has an average rating of "Moderate Buy" and a consensus price target of $600.27.

Cummins Stock Performance

The company has a debt-to-equity ratio of 0.51, a quick ratio of 1.16 and a current ratio of 1.76. The stock has a fifty day simple moving average of $579.49 and a two-hundred day simple moving average of $535.11. The stock has a market capitalization of $92.99 billion, a price-to-earnings ratio of 32.83, a P/E/G ratio of 2.09 and a beta of 1.14.

Cummins (NYSE:CMI - Get Free Report) last issued its quarterly earnings results on Thursday, February 5th. The company reported $5.81 earnings per share for the quarter, topping analysts' consensus estimates of $5.17 by $0.64. The firm had revenue of $8.54 billion during the quarter, compared to the consensus estimate of $8.09 billion. Cummins had a return on equity of 25.71% and a net margin of 8.44%.The business's revenue was up 1.1% compared to the same quarter last year. During the same period last year, the business posted $5.16 EPS. Analysts forecast that Cummins Inc. will post 26.03 earnings per share for the current fiscal year.

Cummins Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Thursday, March 5th. Stockholders of record on Friday, February 20th were given a dividend of $2.00 per share. The ex-dividend date of this dividend was Friday, February 20th. This represents a $8.00 annualized dividend and a dividend yield of 1.2%. Cummins's dividend payout ratio (DPR) is 38.99%.

Insider Activity at Cummins

In other news, Director William I. Miller sold 18,107 shares of the firm's stock in a transaction that occurred on Wednesday, February 11th. The shares were sold at an average price of $597.10, for a total transaction of $10,811,689.70. Following the completion of the sale, the director owned 34,243 shares of the company's stock, valued at $20,446,495.30. This trade represents a 34.59% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through this link. Also, VP Amy Rochelle Davis sold 4,054 shares of the firm's stock in a transaction that occurred on Tuesday, March 3rd. The stock was sold at an average price of $561.34, for a total transaction of $2,275,672.36. Following the sale, the vice president directly owned 15,807 shares of the company's stock, valued at approximately $8,873,101.38. This trade represents a 20.41% decrease in their position. The SEC filing for this sale provides additional information. Over the last quarter, insiders have sold 31,195 shares of company stock worth $18,397,489. Corporate insiders own 0.30% of the company's stock.

Institutional Trading of Cummins

Several large investors have recently made changes to their positions in the company. Resona Asset Management Co. Ltd. grew its stake in shares of Cummins by 0.7% in the 1st quarter. Resona Asset Management Co. Ltd. now owns 44,698 shares of the company's stock valued at $23,825,000 after buying an additional 326 shares during the period. Personal CFO Solutions LLC acquired a new position in Cummins during the first quarter worth $219,000. Saxon Interests Inc. lifted its stake in shares of Cummins by 67.2% in the first quarter. Saxon Interests Inc. now owns 1,679 shares of the company's stock valued at $903,000 after buying an additional 675 shares in the last quarter. Flatrock Wealth Partners LLC bought a new position in shares of Cummins in the first quarter valued at $223,000. Finally, Jackson Thornton Wealth Management LLC lifted its stake in shares of Cummins by 8.9% in the first quarter. Jackson Thornton Wealth Management LLC now owns 870 shares of the company's stock valued at $468,000 after buying an additional 71 shares in the last quarter. 83.46% of the stock is currently owned by institutional investors and hedge funds.

Cummins Company Profile

Cummins Inc NYSE: CMI is a global power technology company that designs, manufactures, distributes and services a broad portfolio of diesel and natural gas engines, electrified powertrains, power generation systems and related components. Founded in 1919 and headquartered in Columbus, Indiana, Cummins has grown into one of the world's leading suppliers of internal combustion engines and a provider of technologies that reduce emissions and improve fuel efficiency.

The company's product lineup includes heavy-, medium- and light-duty engines for on-highway and off-highway applications, generator sets and power systems for commercial and industrial use, and key engine components such as turbochargers, fuel systems, air handling, filtration and aftertreatment solutions.

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