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Valued at a market cap of almost $49.4 billion, Cummins Inc. (CMI) designs, manufactures, distributes, and services diesel and natural gas engines, electric and hybrid powertrains, and related components. The Columbus, Indiana-based company is expected to announce its fiscal Q4 earnings results on Tuesday, Feb. 4.
Ahead of this event, analysts project the specialty industrial machinery company to report a profit of $4.71 per share, up 13.8% from $4.14 per share in the year-ago quarter. The company has surpassed Wall Street's earnings estimates in two of the last four quarters while missing on other two occasions. In Q3, CMI’s adjusted EPS of $5.60 outpaced the forecasted figure by a solid margin of 14.5%.
For fiscal 2024, analysts expect CMI to report an EPS of $20.75, up 5.4% from $19.69 in fiscal 2023.
Shares of CMI have rallied 49.2% over the past 52 weeks, significantly outperforming both the S&P 500 Index's ($SPX) 24.4% rise and the Industrial Select Sector SPDR Fund’s (XLI) 18.4% return over the same time frame.
On Nov. 5, CMI’s stock soared 8.9% after its better-than-expected Q3 earnings release. The company’s revenue remained unchanged at $8.5 billion and surpassed the Wall Street estimates of $8.31. Its robust international revenue growth was somewhat offset by challenges in its North American heavy-duty truck market. On the other hand, its adjusted EPS of $5.60 climbed 18.4% from the year-ago quarter and outpaced the forecasted figure by 14.5%. The bottom-line growth was primarily fueled by a 180-bps expansion in its EBITDA margin.
Moreover, CMI raised its full-year 2024 EBITDA guidance to 15.5%, which might have further bolstered investor confidence.
Wall Street analysts are moderately optimistic about Cummins’ stock, with a "Moderate Buy" rating overall. Among 18 analysts covering the stock, five recommend "Strong Buy," one indicates a “Moderate Buy,” 11 suggest “Hold,” and one suggests a “Moderate Sell” rating. This configuration is slightly more bullish than two months ago, with four analysts suggesting a “Strong Buy.”
The mean price target for CMI is $382.53, which indicates a modest 6.3% potential upside from the current levels.
