Cummins Inc. (CMI - Free Report) is acquiring Efficient Drivetrains, Inc. (“EDI”), a company that engages in the designing and manufacturing of hybrid, and fully-electric power solutions for the commercial market. This acquisition will aid Cummins to be a global leader in electrified power. The deal is expected to complete by the third quarter on satisfying customary closing conditions.
EDI’s skilled workforce and electrification abilities will broaden Cummins’ electrification expertise and products. Further, in real time, EDI’s hybrid system is capable of switching between fully-electric, series and parallel modes.
For over a decade, Cummins has been developing its electrification capabilities. Moreover, over the past nine months, the company has accelerated efforts to build an entire range of electric storage through investments and acquisitions of businesses. In January 2018, the company announced its plan to acquire the automotive battery business of the United Kingdom’s Johnson Matthey. Earlier, in October 2017, Cummins acquired battery pack expertise and resources of Brammo.
Cummins Inc. Price and Consensus
Silicon Valley, CA-based EDI has a product portfolio of hybrid-electric drivetrain systems, with a diverse customer base. This acquisition will aid Cummins to grow its market share in various electrified markets along with increasing its product portfolio.
In the past three months, Cummins’ stock has moved down 17.8%, underperforming 3.2% decline of the industry it belongs to.
Zacks Rank & Other Stocks to Consider
Currently, Cummins has a Zacks Rank #2 (Buy). Other top-ranked stocks in the auto space are Magna International Inc. (MGA - Free Report) , Allison Transmission Holdings, Inc. (ALSN - Free Report) and Visteon Corporation (VC - Free Report) , each carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Magna has an expected long-term growth rate of 8.5%. Shares of the company have risen 24.8% over the past year.
Allison Transmission has an expected long-term growth rate of 10%. Shares of the company have risen 6.2% over the past year.
Visteon has an expected long-term growth rate of 15%. Shares of the company have risen 25.4% over the past year.
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