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Investing.com - Bernstein SocGen Group raised its price target on Cummins (NYSE:CMI) to $385.00 from $319.00 on Wednesday, while maintaining a Market Perform rating on the stock. The stock currently trades at $379.51, near its 52-week high of $387.90, with InvestingPro data showing the stock is fairly valued based on its proprietary Fair Value model.
The price target increase follows Cummins’ second-quarter earnings report, which showed earnings of $6.43 per share, exceeding street expectations by 24%. The company’s strong financial position is reflected in its P/E ratio of 17.8x and trailing twelve-month earnings of $21.26 per share. Despite the strong performance, the company has not reinstated its full-year guidance due to uncertainties related to macroeconomic conditions, freight, and tariffs.
Bernstein SocGen noted that Cummins’ power business continues to outperform expectations, while its truck segment is underperforming. The firm acknowledged that Cummins is effectively managing price/cost dynamics and has taken proactive measures to streamline its cost structure, as evidenced by its first-half margins. InvestingPro analysis shows the company maintains a strong financial health score of "GOOD," with liquid assets exceeding short-term obligations and a moderate debt level.
Tariffs created a $22 million headwind for Cummins in the second quarter and are expected to increase to between $20-50 million in the third quarter before becoming net neutral by the fourth quarter following successful negotiations with original equipment manufacturers.
The research firm highlighted challenges with margins this year, noting that while SG&A expenses have been easier to adjust in previous down cycles, spending will remain elevated due to upcoming product launches, along with R&D expenses that are expected to decrease after 2026.
In other recent news, Cummins Inc . reported impressive financial results for the second quarter of 2025, exceeding analysts’ expectations. The company achieved an earnings per share (EPS) of $6.43, surpassing the forecasted $5.26. Cummins’ revenue also exceeded projections, reaching $8.6 billion compared to the expected $8.47 billion. These results highlight a strong performance for the company, reflecting positively on its financial health. The earnings announcement has garnered attention from investors and analysts alike. The positive financial results indicate robust operational efficiency and effective management strategies. This development is likely to influence investor sentiment and could potentially impact future analyst ratings. Cummins’ recent performance is a focal point for stakeholders monitoring the company’s progress.
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