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

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Cummins (CMI - Free Report) closed at $234.87 in the latest trading session, marking a +1% move from the prior day. This change outpaced the S&P 500's 0.14% gain on the day. Meanwhile, the Dow gained 0.22%, and the Nasdaq, a tech-heavy index, added 0.09%.

Coming into today, shares of the engine maker had lost 1.97% in the past month. In that same time, the Auto-Tires-Trucks sector lost 2.7%, while the S&P 500 lost 1.27%.

Wall Street will be looking for positivity from Cummins as it approaches its next earnings report date. On that day, Cummins is projected to report earnings of $4.78 per share, which would represent year-over-year growth of 48.91%. Our most recent consensus estimate is calling for quarterly revenue of $8.24 billion, up 12.41% from the year-ago period.

CMI's full-year Zacks Consensus Estimates are calling for earnings of $19.76 per share and revenue of $33.23 billion. These results would represent year-over-year changes of +30.69% and +18.38%, respectively.

Investors might also notice recent changes to analyst estimates for Cummins. These revisions help to show the ever-changing nature of 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.

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. The Zacks Consensus EPS estimate has moved 0.11% lower within the past month. 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 11.77. Its industry sports an average Forward P/E of 11.77, so we one might conclude that Cummins is trading at a no noticeable deviation comparatively.

It is also worth noting that CMI currently has a PEG ratio of 1.16. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Automotive - Internal Combustion Engines industry currently had an average PEG ratio of 1.16 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 103, which puts it in the top 41% 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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