Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, and engine-related component products. It operates through four segments: Engine, Distribution, Components, and Power Generation. The company was founded in 1919 and is based in Columbus, Indiana.
CMI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Cummins Inc. To summarize, we found that Cummins Inc ranked in the 60th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 62.67%. The most interesting components of our discounted cash flow analysis for Cummins Inc ended up being:
The company has produced more trailing twelve month cash flow than 93.21% of its sector Industrials.
The business' balance sheet suggests that 11% of the company's capital is sourced from debt; this is greater than just 24.29% of the free cash flow producing stocks we're observing.
CMI's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 38.61% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Cummins Inc? See MGRC, AIMC, AVY, CSX, and FWRD.
In this article we will check out the progression of hedge fund sentiment towards Cummins Inc. (NYSE:CMI) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 […]