Cummins is a giant in the diesel engine and power generation systems manufacturing sector. 

The strength of Cummins’ business is not only in its developed distribution network – more than 500 representative offices – but also in its strong position as a supplier of equipment and components for hydrogen energy. In addition, Cummins is actively involved in the global production of electric vehicles, which also makes it a fairly strong player in the segment of the production of engines and parts for them.

The current US government’s bet on infrastructure has provided Cummins with long-term orders from the construction sector – this is equipment used at factories and construction sites. 

In the third quarter of 2022 , Cummins showed the following results:

– revenue +23% YoY to $7.3 billion;

– EPS -23.9% to $2.83 per share;

– net profit -25.1% YoY to $400 million.

The drawdown of the last two indicators is associated with the acquisition of Meritor, a company that deals with drivetrain and brake systems. Cummins notes some compression of demand in China, but tracks growing interest in the US. The US government’s plans for 2023 maintain the demand for Cummins development and production. 

For advocates of fundamental support, it is worth knowing that Cummins has been paying dividends regularly for 37 years. Their profitability is no more than 1.7-2%, but it is solid, reliable, stable. 

A year ago, it was possible to say that Cummins has a serious risk in the form of a “green” strategy, but now it is no longer so relevant. 

The consensus forecast for Cummins shares in the future of the year is $300-315.