Evercore ISI Downgrades Cummins (CMI) to In Line

Evercore ISI analyst David Raso downgraded Cummins (NYSE: CMI) from Outperform to In Line.

The analyst comments "The North America truck cycle in trouble (’24 volume and maybe pricing too) but more of that weakness built into PCAR valuation (<5x EV-to-23e EBITDA, <9x P/E, consensus has ’24 EPS down 195) than CMI (8x EBITDA, 11x P/E, consensus only down 1% EPS in ’24; CMI more diverse, true, but that EPS decline gap too wide) while the “other side of that truck weakness” is a strong 2025 recovery on North America truck pre-buy and more pure play Paccar with large dividend like attracts patient long-only money earlier than Cummins (with upcoming potentially sizable EPA penalty for Cummins not helping either). Cummins will have its day again, maybe even as soon as if we get strong upside surprise in China (largest direct sales exposure to China in our sector) and mid-decade Cummins could add to the ’25 pre-buy growth with some market share gains as legacy players outside their diesel production to Cummins. Near-term, though, downside risk at North America truck and a spotty China recovery suggest we can step aside for now."

For an analyst ratings summary and ratings history on Cummins click here. For more ratings news on Cummins click here.

Shares of Cummins closed at $223.74 yesterday.

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