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Cummins (CMI) Dips More Than Broader Markets: What You Should Know

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Cummins (CMI - Free Report) closed at $233.80 in the latest trading session, marking a -1.14% move from the prior day. This change lagged the S&P 500's daily loss of 0.47%.

Coming into today, shares of the engine maker had lost 1.98% in the past month. In that same time, the Auto-Tires-Trucks sector lost 4.17%, while the S&P 500 gained 3.38%.

Wall Street will be looking for positivity from CMI as it approaches its next earnings report date. This is expected to be August 3, 2021. The company is expected to report EPS of $4.06, up 108.21% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.11 billion, up 58.55% from the prior-year quarter.

CMI's full-year Zacks Consensus Estimates are calling for earnings of $16.21 per share and revenue of $24.5 billion. These results would represent year-over-year changes of +34.97% and +23.68%, respectively.

Any recent changes to analyst estimates for CMI should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.2% higher. CMI is currently a Zacks Rank #3 (Hold).

Looking at its valuation, CMI is holding a Forward P/E ratio of 14.59. Its industry sports an average Forward P/E of 12.92, so we one might conclude that CMI is trading at a premium comparatively.

It is also worth noting that CMI currently has a PEG ratio of 1.3. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Automotive - Internal Combustion Engines industry currently had an average PEG ratio of 1.3 as of yesterday's close.

The Automotive - Internal Combustion Engines industry is part of the Auto-Tires-Trucks sector. This group has a Zacks Industry Rank of 252, putting it in the bottom 1% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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