We expect strong Q1 performance from Cummins

Ticker: CMI

Author: Stock Analyst  Date: 2021/04/30

American manufacturer of diesel engines for tractors, buses, armored vehicles and self-propelled ships, Cummins, whose shares we have coverage, will present its financial results for the first fiscal quarter on May 4 before trading in the United States.

We expect that the company's revenue in the reporting period will increase by 5.84% YoY to reach $5.3 billion, and the adjusted earnings per share may be about $3.46, which is 8.8% higher than in the same period. period of the last year.

That said, we believe that the engine division's revenues in Jan-Mar increased by 3.6% YoY to $ 2.24bn; the revenue of the power equipment manufacturing division grew by 4% YoY to $ 920 million; segment revenues for the production of components increased by 14.8% YoY to $ 1.73 billion; distribution division's revenue increased by 3.8% YoY to $ 1.88 billion; The revenues of the electrical equipment manufacturing division jumped 2.5 times to $ 24.5 million.

In addition, we believe that Cummins' work in the hydrogen fuel cell R&D and manufacturing segment has enabled the company to increase margins during the reporting period.

Since the beginning of this year, the company's shares have risen in price by almost 16%, and we retain our Buy recommendation for them. The target price for March 2022 is $ 344.7, which is equivalent to 35% upside from current levels.