Cummins, Inc. (CMI) is set to benefit from fuel economy improvements, new emission standards and increased prices. Liquidity is also improving. However, a slump in key markets, including the U.S., and a soft heavy-duty truck market that forms over 50% of the company’s business may raise concerns.
Nevertheless, the company reported strong results in the most recent quarter, driven by continued strength in China, India and Brazil, as well as an increase in demand for on-highway truck engines and components in North America. It also surpassed the Zacks Consensus Estimate in the quarter.
As such, we have upgraded the recommendation from Neutral to Outperform with a target price of $68.Zacks Investment Research
