logo
  Join        Login             Stock Quote

Cummins (CMI) Raised To 'Outperform' By BMO Capital, PT Increased

 November 08, 2012 02:36 PM
 


(By Balachander) Cummins Inc. (NYSE: CMI) shares were raised to "outperform" from "market perform" and the price target increased to $120 from $79 by BMO Capital Markets.

"Global growth seems to be stabilizing here with a slight upward bias and we continue to be attracted by pent-up demand in the developed countries' truck markets, which should drive higher EPS over the next two years," the brokerage wrote.

"While we are unsure if the shares will appreciate considerably if 2013 EPS are down, Cummins' operational leverage to any economic or end-market improvement is substantial, with our EPS estimate possibly more at a downside risk level," BMO said.

[Related -Russia Upsets The Potash Cart]

BMO maintained its 2012, 2013 and 2014 EPS estimates of $8.35, $7.90 and $7.70, respectively as it attempts to capture the downside risk to profitability in a flat to slowly declining global economic environment.

"While we view downside risk at around $70 (18x $4 of trough EPS), upside potential remains substantial, approaching $180 (13x $14 of peak EPS), making the stock extremely attractive for longer-term shareholders," the brokerage wrote.

"Despite all of the improvements in operations, costs, geographic balance, and market share gains, we fear that Cummins results will be wagged by global macro more than any internal initiatives," BMO wrote.

On Thursday, shares of the maker of diesel engines dropped 1.30 percent to trade at $96.85. The stock has been trading in the 52-week range of $82.20 to $129.51.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageUpbeat Forecasts For US Housing Sales In March

The Fiscal Times advises that the “the housing market is about to perk up.” One of the reasons for the read on...

article imageHappy Birthday, Moore's Law - Pearls of Wisdom for Investors

As Moore’s Law turns 50, we reflect on technology’s incredible history and limitless read on...

article imageIndex Investing Is Not Inherently Socialistic

How does capital get allocated to the public stock read on...

article imageDon't Let Fear of a 'Grexit' Keep You Out of European Stocks

After nearly three years of extremely weak economic growth, the European Central Bank is finally delivering read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.