Cummins Inc Stock Buy Recommendation Reiterated (CMI)
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- CMI's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.14, which illustrates the ability to avoid short-term cash problems.
- CMI, with its decline in revenue, underperformed when compared the industry average of 1.5%. Since the same quarter one year prior, revenues fell by 11.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Machinery industry and the overall market, CUMMINS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- In its most recent trading session, CMI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- CUMMINS INC's earnings per share declined by 20.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CUMMINS INC increased its bottom line by earning $9.56 versus $5.28 in the prior year. For the next year, the market is expecting a contraction of 12.0% in earnings ($8.41 versus $9.56).
--Written by a member of TheStreet Ratings Staff. FREE for a limited time only: Get TheStreet Ratings #1 Stock Report NOW!
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