Q3 Preview: Cummins (CMI) Should Benefit from Strength in Emerging Markets, Joint Ventures
Tweet
Share
E-mail
Get Alerts CMI Hot Sheet
Price: $292.34 -0.12%
Rating Summary:
10 Buy, 24 Hold, 3 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
10 Buy, 24 Hold, 3 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Join SI Premium – FREE
Cummins Inc. (NYSE: CMI) is expected to release its third-quarter results Tuesday ahead of the opening bell. A conference call will be held at 10:00 am ET to discuss the results.
The Street is currently looking for earnings of $2.25 per share with $4.61 billion in sales, well above the $1.44 per share in earnings for the third quarter of 2010. The company currently has 13 Buy ratings, five Hold ratings and no analysts suggesting to Sell the stock. Analyst price targets range from $104 to $143 with an average of $123.
For the fourth quarter, the Street is looking for $2.49 per share in earnings and $5.01 billion in sales.
Analyst Comments:
JPMorgan has a Hold rating and $124 price target on shares of CMI ahead of earnings. The firm notes any upside will be driven from its joint ventures in emerging markets. The company’s exposure in emerging markets exceeds $3 billion as roughly 56 percent of its joint ventures are in emerging markets.
Cummins balance sheet is low-end leveraged and offers a potential increase in its dividend or the buyback of its common shares, a JPMorgan analyst said.
Continuing, “If a further deterioration in emerging end markets were to occur, it could adversely impact volume as well as pricing in these regions and could represent a risk to our estimates. A slowdown in emerging markets could negatively impact the company’s JV income. Significant changes in the outlook for developed-market truck builds in 2012 would also be a risk to estimates. Additionally, if the lack of visibility persists multiples may remain compressed, which could result in our price target being too high.”
Goldman Sachs is more bullish on shares of CMI ahead of earnings: the firm currently has a Buy rating on the shares.
Goldman estimates earnings of $2.28 per share and $10.06 for fiscal 2012. The firm believes the risk reward is fairly balanced, expecting more upside than downside risk to management’s fourth-quarter guidance.
An analyst at Goldman said, “We remain Buyers of Cummins where we see underestimated secular growth, leading returns on capital, and compelling relative valuation. We see engine regulations in Latin America and Asia as a meaningfully underappreciated opportunity for Cummins’ leading Components business via a combination of new product sales and share gain opportunities.”
Shares of CMI are trading up 4.63 percent to $98.54 on the session.
The Street is currently looking for earnings of $2.25 per share with $4.61 billion in sales, well above the $1.44 per share in earnings for the third quarter of 2010. The company currently has 13 Buy ratings, five Hold ratings and no analysts suggesting to Sell the stock. Analyst price targets range from $104 to $143 with an average of $123.
For the fourth quarter, the Street is looking for $2.49 per share in earnings and $5.01 billion in sales.
Analyst Comments:
JPMorgan has a Hold rating and $124 price target on shares of CMI ahead of earnings. The firm notes any upside will be driven from its joint ventures in emerging markets. The company’s exposure in emerging markets exceeds $3 billion as roughly 56 percent of its joint ventures are in emerging markets.
Cummins balance sheet is low-end leveraged and offers a potential increase in its dividend or the buyback of its common shares, a JPMorgan analyst said.
Continuing, “If a further deterioration in emerging end markets were to occur, it could adversely impact volume as well as pricing in these regions and could represent a risk to our estimates. A slowdown in emerging markets could negatively impact the company’s JV income. Significant changes in the outlook for developed-market truck builds in 2012 would also be a risk to estimates. Additionally, if the lack of visibility persists multiples may remain compressed, which could result in our price target being too high.”
Goldman Sachs is more bullish on shares of CMI ahead of earnings: the firm currently has a Buy rating on the shares.
Goldman estimates earnings of $2.28 per share and $10.06 for fiscal 2012. The firm believes the risk reward is fairly balanced, expecting more upside than downside risk to management’s fourth-quarter guidance.
An analyst at Goldman said, “We remain Buyers of Cummins where we see underestimated secular growth, leading returns on capital, and compelling relative valuation. We see engine regulations in Latin America and Asia as a meaningfully underappreciated opportunity for Cummins’ leading Components business via a combination of new product sales and share gain opportunities.”
Shares of CMI are trading up 4.63 percent to $98.54 on the session.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Meritage Homes Corporation (MTH) Tops Q1 EPS by 151c; offers guidance
- ESSA Bancorp (ESSA) Tops Q2 EPS by 13c
- Towne Bank (TOWN) Reports In-Line Q1 EPS
Create E-mail Alert Related Categories
Analyst Comments, EarningsRelated Entities
JPMorgan, Dividend, EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
