Cummins (NYSE:CMI) Stock Price Down 4.8% - Time to Sell?

Key Points

• Cummins shares fell 4.8% on Thursday, trading as low as $648.01 and finishing at $637.93, well below the prior close of $669.87.
• Recent analyst updates were mostly positive, with Barclays and Morgan Stanley raising price targets and Truist setting a $815 target. The stock now has a consensus Moderate Buy rating and an average target price of $677.87.
• The company posted strong quarterly results, with EPS of $6.15 beating expectations and revenue of $8.40 billion slightly ahead of estimates. Cummins also announced a $2.00 quarterly dividend, equal to $8.00 annually and a 1.3% yield.

Shares of Cummins Inc. (NYSE:CMI - Get Free Report) traded down 4.8% on Thursday . The stock traded as low as $648.01 and last traded at $637.93. 104,255 shares changed hands during mid-day trading, a decline of 89% from the average session volume of 909,246 shares. The stock had previously closed at $669.87.

Analyst Ratings Changes

A number of analysts recently commented on the company. Barclays upped their price objective on Cummins from $610.00 to $760.00 and gave the company an "overweight" rating in a research report on Wednesday, May 6th. Argus set a $696.00 target price on Cummins in a report on Tuesday, February 10th. UBS Group set a $565.00 target price on Cummins and gave the company a "neutral" rating in a report on Friday, February 6th. Morgan Stanley increased their target price on Cummins from $675.00 to $752.00 and gave the company an "overweight" rating in a report on Wednesday, May 6th. Finally, Truist Financial set a $815.00 target price on Cummins in a report on Wednesday, May 6th. One research analyst has rated the stock with a Strong Buy rating, eleven have given a Buy rating and five have issued a Hold rating to the company. According to MarketBeat.com, the company has a consensus rating of "Moderate Buy" and an average target price of $677.87.

Cummins Stock Performance

The company has a debt-to-equity ratio of 0.50, a current ratio of 1.71 and a quick ratio of 1.11. The business has a 50-day simple moving average of $608.71 and a 200 day simple moving average of $560.58. The firm has a market cap of $88.22 billion, a PE ratio of 33.23, a PEG ratio of 1.66 and a beta of 1.27.

Cummins (NYSE:CMI - Get Free Report) last issued its quarterly earnings results on Tuesday, May 5th. The company reported $6.15 EPS for the quarter, topping analysts' consensus estimates of $5.63 by $0.52. Cummins had a return on equity of 25.25% and a net margin of 7.89%.The business had revenue of $8.40 billion during the quarter, compared to analysts' expectations of $8.37 billion. During the same quarter in the prior year, the business posted $5.96 earnings per share. The business's quarterly revenue was up 2.7% on a year-over-year basis. Equities research analysts forecast that Cummins Inc. will post 28.39 EPS for the current year.

Cummins Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, June 4th. Stockholders of record on Friday, May 22nd will be given a dividend of $2.00 per share. This represents a $8.00 dividend on an annualized basis and a dividend yield of 1.3%. The ex-dividend date is Friday, May 22nd. Cummins's dividend payout ratio is currently 41.52%.

Insider Activity

In other news, VP Amy Rochelle Davis sold 4,054 shares of the 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 completion of the transaction, the vice president directly owned 15,807 shares in the company, valued at approximately $8,873,101.38. This represents a 20.41% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, VP Donald G. Jackson sold 1,600 shares of the stock in a transaction that occurred on Tuesday, February 24th. The shares were sold at an average price of $600.13, for a total value of $960,208.00. Following the transaction, the vice president owned 7,214 shares of the company's stock, valued at $4,329,337.82. This represents a 18.15% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last ninety days, insiders sold 22,397 shares of company stock worth $14,465,833. 0.30% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently modified their holdings of the company. Thompson Investment Management Inc. bought a new stake in shares of Cummins in the 4th quarter valued at approximately $26,000. Activest Wealth Management lifted its stake in shares of Cummins by 537.5% in the 4th quarter. Activest Wealth Management now owns 51 shares of the company's stock valued at $26,000 after purchasing an additional 43 shares during the last quarter. Cedar Mountain Advisors LLC lifted its stake in shares of Cummins by 1,500.0% in the 1st quarter. Cedar Mountain Advisors LLC now owns 48 shares of the company's stock valued at $26,000 after purchasing an additional 45 shares during the last quarter. Wellington Shields Capital Management LLC bought a new stake in shares of Cummins in the 4th quarter valued at approximately $27,000. Finally, Flagship Wealth Advisors LLC bought a new stake in shares of Cummins in the 3rd quarter valued at approximately $28,000. 83.46% of the stock is currently owned by institutional investors.

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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