CMI - Cummins is tipped by Deutsche Bank to see near-term rally

2023-06-29 07:16:59 ET

Deutsche Bank issued a catalyst call buy idea on Cummins Inc. ( NYSE: CMI ) on Thursday.

Analyst Nicole DeBlase said the basis for the short-term investment idea is that Cummins ( CMI ) has underperformed the sector on a year-to-date basis by registering a 3% share price decline vs. an 11% median gain for the other stocks in the firm's coverage universe.

Looking ahead, DeBlase and team see the potential for a sizeable EPS beat for Cummins ( CMI ) in Q2, as North America Class 8 production has remained robust during the quarter. Deusche Bank also sees the potential for a material raise to Cummin's ( CMI ) full year guidance, given the increasing probability that build rates remain steady through year-end, in contrast to ACT's production for a sharp drop-off in Q4.

"Moreover, CMI has very high relative exposure to China, where we view a potential recovery in truck demand as a free call option based on current valuation/forecasts," noted DeBlase.

Shares of Cummins ( CMI ) rose 0.36% in premarket trading on Thursday. The engine manufacturing stock trades about 2.2% above its 200-day moving average.

More on Cummins:

• Cummins: Powering Its Engines
• Valuation metrics on Cummins
• Recent options trades on Cummins
• Seeking Alpha's Quant Rating for Cummins

For further details see: