Why Should You Put Cummins Inc. (NYSE: CMI) On Your Portfolio?


    BlackRock Fund Advisors recently announced the acquisition of new stake in Cummins Inc. (NYSE:CMI). The institutional investor has increased its shareholding in the Industrials company by 2.99% to 8.89 million shares with purchase of 0.26 million shares. This fresh investment now brings its stake to 6.03% valued currently at $1.54 billion. In addition, SSgA Funds Management, Inc. raised its holdings by 98214.0 to 7.19 million shares. And Hotchkis & Wiley Capital Manageme. has lifted its position by 13.10% or 0.36 million shares – to 3.13 million shares.

    With over 0.92 million Cummins Inc. (CMI) shares trading Thursday and a closing price of $183.73 on the day, the dollar volume was approximately $169.38 million. The shares have shown a positive weekly performance of 6.71% and its price on 07/16/20 gained nearly 1.11%. Currently, there are 149.30M common shares owned by the public and among those 147.02M shares have been available to trade.

    An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 25 analysts who have offered their price forecasts for CMI have a consensus price objective of $174.95. The analysts have set the share’s price value over the next 12 months at a high of $203.00 and a low of $130.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Cummins Inc. stock is 2.80 for the next 12 months. The average price target is -6.17% below its last price level and a downside to the estimated low will see the stock lose -41.33% over that period. But an upside of 9.49% will see the stock hit the forecast high price target while mean target price for the stock is $171.00.

    Insiders at the company have transacted a total of 63 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 36 of these insider trades were purchases, accounting for 162,995 shares. Insider sales of the common stock occurred on 27 occasions, with total insider shares sold totaling 76,848 shares.

    The top 3 mutual fund holders in Cummins Inc. are Vanguard Total Stock Market Index, Vanguard 500 Index Fund, and Government Pension Fund – Global. Vanguard Total Stock Market Index owns 4.42 million shares of the company’s stock, all valued at over $766.42 million. The company sold 25580.0 shares recently to bring their total holdings to about 3.00% of the shares outstanding. Vanguard 500 Index Fund sold 6177.0 shares to see its total holdings shrink to 3.13 million shares valued at over $542.09 million and representing 2.12% of the shares outstanding. Government Pension Fund – Global sold 58779.0 shares to bring its total holdings to over 1.63 million shares at a value of $282.07 million. Government Pension Fund – Global now owns shares totaling to 1.10% of the shares outstanding.

    Shares of Cummins Inc. (NYSE: CMI) opened at $181.22, down -$0.5 from a prior closing price of $181.72. However, the script later closed the day at $183.73, up 1.11%. The company’s stock has a 5-day price change of 6.71% and 26.68% over the past three months. CMI shares are trading 2.67% year to date (YTD), with the 12-month market performance up to 8.53% higher. It has a 12-month low price of $101.03 and touched a high of $186.73 over the same period. Currently, 0.92 million shares have been traded, compared to an average intraday trading volume of 1.29 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 6.04%, 9.06%, and 11.64% respectively.

    Institutional ownership of Cummins Inc. (NYSE: CMI) shares accounts for 85.00% of the company’s 149.30M shares outstanding. Mutual fund holders own 36.74%, while other institutional holders and individual stakeholders account for 47.20% and 1.29% respectively.

    It has a market capitalization of $26.85B and a beta (3y monthly) value of 1.15. The stock’s trailing 12-month PE ratio is 13.48, while the earnings-per-share (ttm) stands at $13.63. Price movements for the stock have been influenced by the stock’s volatility, which stands at 2.15% over the week and 2.19% over the month.

    Analysts forecast that Cummins Inc. (CMI) will achieve an EPS of $0.88 for the current quarter, $1.6 for the next quarter and $10.55 for 2021. The lowest estimate earnings-per-share for the quarter is $0.11 while analysts give the company a high EPS estimate of $1.7. Comparatively, EPS for the current quarter was $4.27 a year ago. Earnings per share for the fiscal year are expected to increase by 9.50%, and 42.92% over the next financial year. EPS should shrink at an annualized rate of -4.91% over the next five years, compared to 9.90% over the past 5-year period.

    If you are looking to buy this stock, then you may note that the average analyst recommendation by 25 brokerage firm advisors rate Cummins Inc. (CMI) as a “Moderate Buy” at a consensus score of 2.80. Specifically, 7 Wall Street analysts polled rate the stock as a buy, while 16 of the 25 advise that investors “hold,” and 2 rated it as a “Sell.”

    Looking at the support for the CMI, a number of firms have released research notes about the stock. Deutsche Bank stated their Hold rating for the stock in a research note on July 01, 2020, with the firm’s price target at $172. Piper Sandler coverage for the Cummins Inc. (CMI) stock in a research note released on May 12, 2020 offered a Neutral rating with a price target of $162. Goldman was of a view on February 13, 2020 that the stock is Buy, while UBS gave the stock Neutral rating on February 06, 2020, issuing a price target of $162- $167. Wells Fargo on their part issued Overweight rating on January 14, 2020.


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