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 29th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 53.5%. The most interesting components of our discounted cash flow analysis for Cummins Inc ended up being:
In the past 5.45 years, Cummins Inc has a compound free cash flow growth rate of 0.02%; that's better than only 23.09% of cash flow producing equities in the Industrials sector, where it is classified.
The business' balance sheet reveals debt to be 10% of the company's capital (with equity being the remaining amount). Approximately merely 24.61% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
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 35.29% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
EMR, GTES, WNC, NDSN, and VSEC can be thought of as valuation peers to CMI, in the sense that they are in the Industrials sector and have a similar price forecast based on DCF valuation.
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Cummins Inc. (CMI) Morgan Stanley Virtual 8th Annual Laguna Conference Sept 16, 2020, 12:00 PM ET Company Participants Courtney Yakavonis - Morgan Stanley Conference Call Participants James Hopkins - IR Presentation Courtney Yakavonis Good morning, everyone. I'm Courtney Yakavonis, the US machinery analyst at Morgan Stanley. Next up, we have...
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COLUMBUS, Ind.--(BUSINESS WIRE)--Today, Cummins Inc. (NYSE: CMI) announced the promotion of six leaders to vice presidents, effective October 1. The employees are John Gaidoo, Judy Brunson, Bonnie Fetch, Cathy Van Way, John Brockhaus and Angel Franklin. “Each of these talented leaders is a champion of our company values and has demonstrated their ability to deliver results for our customers and improve the lives of those around them,” said Tom Linebarger, Chairman and CEO, Cummins Inc. “These a