Cummins Valuation

Is CMI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of CMI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CMI ($291.15) is trading below our estimate of fair value ($331.63)

Significantly Below Fair Value: CMI is trading below fair value, but not by a significant amount.


Key Valuation Metric

Which metric is best to use when looking at relative valuation for CMI?

Other financial metrics that can be useful for relative valuation.

CMI key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.3x
Enterprise Value/EBITDA10.3x
PEG Ratio2x

Price to Earnings Ratio vs Peers

How does CMI's PE Ratio compare to its peers?

The above table shows the PE ratio for CMI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average17.2x
PCAR PACCAR
11.2x-2.8%US$56.5b
WAB Westinghouse Air Brake Technologies
31.7x17.7%US$29.1b
CAT Caterpillar
15.1x-2.0%US$170.0b
ALSN Allison Transmission Holdings
10.9x4.4%US$7.3b
CMI Cummins
20.5x10.5%US$39.8b

Price-To-Earnings vs Peers: CMI is expensive based on its Price-To-Earnings Ratio (20.5x) compared to the peer average (17.2x).


Price to Earnings Ratio vs Industry

How does CMI's PE Ratio compare vs other companies in the US Machinery Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a9.4%
n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a9.4%
n/an/an/a
No more companies

Price-To-Earnings vs Industry: CMI is good value based on its Price-To-Earnings Ratio (20.5x) compared to the US Machinery industry average (20.9x).


Price to Earnings Ratio vs Fair Ratio

What is CMI's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CMI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio20.5x
Fair PE Ratio24.5x

Price-To-Earnings vs Fair Ratio: CMI is good value based on its Price-To-Earnings Ratio (20.5x) compared to the estimated Fair Price-To-Earnings Ratio (24.5x).


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst CMI forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$291.15
US$299.96
+3.0%
8.7%US$345.00US$246.00n/a19
Jul ’25US$272.29
US$299.76
+10.1%
8.6%US$345.00US$246.00n/a20
Jun ’25US$281.73
US$298.41
+5.9%
8.6%US$345.00US$246.00n/a20
May ’25US$283.87
US$288.42
+1.6%
9.8%US$360.00US$240.00n/a21
Apr ’25US$294.53
US$274.30
-6.9%
8.2%US$321.00US$237.00n/a20
Mar ’25US$270.26
US$266.15
-1.5%
7.4%US$303.90US$237.00n/a19
Feb ’25US$242.97
US$258.17
+6.3%
8.4%US$303.90US$225.00n/a19
Jan ’25US$239.57
US$256.35
+7.0%
7.7%US$303.90US$231.00n/a18
Dec ’24US$226.31
US$255.79
+13.0%
8.3%US$303.90US$216.00n/a18
Nov ’24US$218.05
US$255.54
+17.2%
7.6%US$290.00US$216.00n/a17
Oct ’24US$228.46
US$258.07
+13.0%
7.7%US$290.00US$216.00n/a17
Sep ’24US$236.64
US$260.18
+9.9%
8.1%US$290.00US$216.00n/a18
Aug ’24US$264.99
US$257.67
-2.8%
8.9%US$290.00US$216.00n/a18
Jul ’24US$245.16
US$254.06
+3.6%
7.9%US$290.00US$216.00US$272.2918
Jun ’24US$206.86
US$255.65
+23.6%
8.7%US$299.00US$216.00US$281.7320
May ’24US$234.58
US$260.35
+11.0%
9.0%US$303.90US$216.00US$283.8720
Apr ’24US$238.88
US$260.94
+9.2%
9.2%US$303.90US$216.00US$294.5319
Mar ’24US$249.21
US$260.94
+4.7%
9.2%US$303.90US$216.00US$270.2619
Feb ’24US$250.91
US$258.73
+3.1%
9.0%US$303.90US$216.00US$242.9719
Jan ’24US$242.29
US$258.55
+6.7%
9.3%US$304.00US$216.00US$239.5719
Dec ’23US$249.26
US$255.97
+2.7%
10.2%US$304.00US$209.00US$226.3119
Nov ’23US$246.70
US$247.07
+0.2%
11.4%US$303.90US$190.00US$218.0519
Oct ’23US$203.51
US$244.55
+20.2%
11.9%US$303.90US$190.00US$228.4619
Sep ’23US$214.92
US$244.44
+13.7%
12.0%US$303.90US$190.00US$236.6419
Aug ’23US$217.84
US$235.08
+7.9%
12.8%US$303.90US$187.00US$264.9918
Jul ’23US$194.11
US$244.36
+25.9%
11.1%US$303.90US$205.00US$245.1618

Analyst Forecast: Target price is less than 20% higher than the current share price.


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