CMI Cummins Inc. - Fundamental Analysis
NEUTRAL
CMI Stock | Fundamental Analysis & Investment Insights
NYSE
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Industrials
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Specialty Industrial Machinery
Current Price
$462.61
Analyst Target
$498.44
+7.7% Upside
52W High
$484.84
52W Low
$260.02
AI Analysis
Powered by advanced machine learning algorithms
Confidence Score
72%
Analysis Accuracy
Cummins Inc. (CMI) trades at a premium valuation with solid historical profitability and a disciplined capital return policy, but faces near-term headwinds reflected in declining earnings and revenue. Despite a strong 5-year total return (+125.6%) and recent price strength, YoY EPS contraction of -14.2% and Q/Q EPS decline of -21.8% raise concerns about cyclical softness in industrial demand. The stock is attractively valued relative to sector peers on P/E and forward P/E, yet insider selling worth $23.93M over the past six months contrasts with a bullish analyst consensus (target $498.44, +7.7% upside). Profitability remains robust with ROE at 22.77%, though gross and operating margins have compressed versus historical norms, and the company lags sector averages in revenue growth and return metrics.
Key Strengths
ROE of 22.77% exceeds sector average of 32.70% only for select peers like NSC and EMR, indicating efficient use of equity capital
Forward P/E of 20.54 is below sector average of 32.09 and in line with ITW (23.64), offering relative value appeal
Healthy dividend yield of 1.73% with a sustainable 38.67% payout ratio, supporting income-oriented investors
Debt/Equity of 0.63 is below sector average of 1.26, reflecting conservative leverage and strong balance sheet flexibility
Recent earnings surprises have been positive in 3 of last 4 quarters, including a massive +167.4% beat in Q2 2024, signaling operational resilience
Key Risks
Earnings growth down -34.1% YoY and -33.7% Q/Q, indicating severe near-term profitability pressure
Revenue growth of -1.6% YoY underperforms sector average of +5.97%, suggesting demand weakness in core markets
Gross margin at 26.03% and operating margin at 12.13% are below historical levels and peer benchmarks like ITW and CTAS
Insider selling by CFO and officers totaling $23.93M signals potential lack of confidence at the executive level
PEG ratio and EV/EBITDA data unavailable, limiting full valuation and growth-adjusted assessment
AI Fair Value Estimate
Based on comprehensive analysis
$498.44
+7.7% above current price
Performance Snowflake
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Stock Price & Analyst Targets
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Historical Performance Trends
Long-term financial metrics and growth patterns
Valuation Metrics
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Profitability, Growth & Financial Health
Detailed profit margins, ROE, debt ratios, and liquidity metrics
Sector Comparison & Peer Analysis
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Insider Trading & Analyst Ratings
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