Cummins (CMI) Cut to “Hold” at Zacks Investment Research
Zacks Investment Research downgraded shares of Cummins (NYSE:CMI) from a buy rating to a hold rating in a report issued on Monday morning.
According to Zacks, “In second-quarter 2018, Cummins’ adjusted earnings and revenues beat the Zacks Consensus Estimate. Increased engines and components demand for heavy- and medium-duty truck, along with an improved demand for mining and power generation equipment, will helped the company drive its financials. This has also encouraged the company to raise its guidance for 2018. In sync with its aim to be a leader in electrified power, the company announced the acquisition of Efficient Drivetrains, Inc., in July 2018. Moreover, Cummins has raised its aim of returning cash inflow from operations to 75% from the initial plan of 50%. However, recalling medium and heavy-duty trucks with engines manufactured between 2010 and 2015 along with higher variable compensation costs will pressurize Cummins profit margin. In the last six months shares of the company have underperformed the sector it belongs to.”
A number of other analysts have also recently weighed in on the company. Standpoint Research upgraded Cummins from a hold rating to a buy rating in a research report on Monday, June 18th. Stifel Nicolaus upped their price target on Cummins from $160.00 to $172.00 and gave the company a buy rating in a research report on Wednesday, August 1st. JPMorgan Chase & Co. lowered Cummins from a neutral rating to an underweight rating and reduced their price objective for the stock from $156.00 to $137.00 in a research note on Friday, August 24th. Morgan Stanley set a $165.00 price objective on Cummins and gave the stock a hold rating in a research note on Monday, May 7th. Finally, Oppenheimer reduced their price objective on Cummins from $207.00 to $192.00 and set an outperform rating on the stock in a research note on Wednesday, May 2nd. Four analysts have rated the stock with a sell rating, sixteen have issued a hold rating and six have assigned a buy rating to the company. The company presently has a consensus rating of Hold and a consensus target price of $165.86.
Cummins (NYSE:CMI) last announced its quarterly earnings results on Tuesday, July 31st. The company reported $3.32 earnings per share for the quarter, missing analysts’ consensus estimates of $3.63 by ($0.31). Cummins had a net margin of 4.67% and a return on equity of 26.30%. The company had revenue of $6.13 billion during the quarter, compared to the consensus estimate of $5.81 billion. During the same quarter last year, the company earned $2.53 earnings per share. The business’s revenue was up 20.8% on a year-over-year basis. research analysts predict that Cummins will post 14.94 EPS for the current fiscal year.
The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, September 4th. Investors of record on Wednesday, August 22nd will be issued a $1.14 dividend. This represents a $4.56 dividend on an annualized basis and a yield of 3.22%. The ex-dividend date is Tuesday, August 21st. This is an increase from Cummins’s previous quarterly dividend of $1.08. Cummins’s dividend payout ratio is currently 42.94%.
In other Cummins news, Director Alexis M. Herman sold 735 shares of the stock in a transaction dated Friday, August 3rd. The stock was sold at an average price of $139.90, for a total value of $102,826.50. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, VP Tracy A. Embree sold 462 shares of the stock in a transaction dated Monday, August 6th. The stock was sold at an average price of $141.70, for a total value of $65,465.40. Following the completion of the sale, the vice president now owns 4,122 shares of the company’s stock, valued at $584,087.40. The disclosure for this sale can be found here. Corporate insiders own 0.62% of the company’s stock.
Several institutional investors have recently made changes to their positions in the business. BlackRock Inc. increased its holdings in shares of Cummins by 4.0% in the first quarter. BlackRock Inc. now owns 12,138,618 shares of the company’s stock worth $1,967,548,000 after acquiring an additional 463,368 shares in the last quarter. Boston Partners increased its holdings in shares of Cummins by 45.4% in the second quarter. Boston Partners now owns 4,918,989 shares of the company’s stock worth $654,225,000 after acquiring an additional 1,534,792 shares in the last quarter. FMR LLC increased its holdings in shares of Cummins by 11.6% in the second quarter. FMR LLC now owns 2,385,506 shares of the company’s stock worth $317,272,000 after acquiring an additional 248,721 shares in the last quarter. Franklin Resources Inc. increased its holdings in shares of Cummins by 9.1% in the first quarter. Franklin Resources Inc. now owns 2,368,298 shares of the company’s stock worth $383,878,000 after acquiring an additional 197,413 shares in the last quarter. Finally, Northern Trust Corp increased its holdings in shares of Cummins by 2.4% in the first quarter. Northern Trust Corp now owns 2,274,023 shares of the company’s stock worth $368,596,000 after acquiring an additional 52,223 shares in the last quarter. Institutional investors own 79.42% of the company’s stock.
Cummins Inc designs, manufactures, distributes, and services diesel and natural gas engines, and engine-related component products worldwide. It operates through four segments: Engine, Distribution, Components, and Power Systems segments. The Engine segment manufactures and markets a range of diesel and natural gas powered engines under the Cummins and other customer brands for the heavy-and medium-duty truck, bus, recreational vehicle, light-duty automotive, construction, mining, marine, rail, oil and gas, defense, and agricultural markets.
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