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Cummins (CMI) Outpaces Stock Market Gains: What You Should Know

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Cummins (CMI - Free Report) closed the most recent trading day at $234.37, moving +1.91% from the previous trading session. The stock outpaced the S&P 500's daily gain of 1.3%. Meanwhile, the Dow gained 0.98%, and the Nasdaq, a tech-heavy index, added 7.48%.

Heading into today, shares of the engine maker had lost 10.68% over the past month, outpacing the Auto-Tires-Trucks sector's loss of 10.91% and lagging the S&P 500's loss of 2.95% in that time.

Cummins will be looking to display strength as it nears its next earnings release. In that report, analysts expect Cummins to post earnings of $4.70 per share. This would mark year-over-year growth of 16.34%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8 billion, up 25.27% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $18.95 per share and revenue of $32.06 billion, which would represent changes of +25.33% and +14.19%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Cummins. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Cummins currently has a Zacks Rank of #3 (Hold).

Investors should also note Cummins's current valuation metrics, including its Forward P/E ratio of 12.13. Its industry sports an average Forward P/E of 11.57, so we one might conclude that Cummins is trading at a premium comparatively.

We can also see that CMI currently has a PEG ratio of 1.33. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. CMI's industry had an average PEG ratio of 1.33 as of yesterday's close.

The Automotive - Internal Combustion Engines industry is part of the Auto-Tires-Trucks sector. This industry currently has a Zacks Industry Rank of 98, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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