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Columbus, Indiana-based Cummins Inc. (CMI) offers various power solutions and is a leading global designer, manufacturer, and distributor of diesel, natural gas engines and powertrain-related component products. Valued at a market cap of $44.2 billion, the company’s powertrain components include fuel systems, turbochargers, transmissions, batteries, and electrified power systems, among others.
Companies valued at $10 billion or more are typically classified as “large-cap stocks,” and Cummins fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the specialty industrial machinery industry. Cummins leads in engine efficiency, emissions reduction, and alternative fuels, pioneering hydrogen, electric, and hybrid power. Its clean energy innovations meet global standards, while a diverse revenue stream across industries ensures financial stability and long-term resilience.
This powertrain-related components manufacturer is currently trading 15.9% below its 52-week high of $387.90, reached on Dec. 9, 2024. CMI stock has declined 9.7% over the past three months, lagging behind the broader S&P 500 Index’s ($SPX) 6.2% dip during the same time frame.
Moreover, on a YTD basis, shares of Cummins are down 6.4%, underperforming SPX’s 3.5% decline. However, in the longer term, CMI has rallied 18.7% over the past 52 weeks, outpacing SPX’s 10.9% rise over the same period.
However, Cummins has been trading above its 200-day moving average but slipped below it in mid-March. It has also stayed under its 50-day moving average since early March, reinforcing a bearish trend and signaling potential weakness in its recent stock performance.
On Feb. 4, CMI closed up 4.4% after its Q4 earnings release as the company delivered better-than-expected adjusted EPS of $5.16 and revenue of $8.4 billion. However, revenue saw a slight 1.1% decline year-over-year, primarily due to lower engine and components segment sales, mainly fueled by softened demand in global heavy-duty truck markets and lower North America pickup units. Additionally, its EBITDA rebounded to $1 billion, a significant improvement from the $878 million loss recorded in the prior-year quarter.
CMI has considerably outpaced its rival, Illinois Tool Works Inc.’s (ITW) 4% decline over the past 52 weeks but has lagged behind ITW’s 1% gain on a YTD basis.
Despite CMI’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 18 analysts covering it, and the mean price target of $404.43 suggests 24% premium to its current levels.
