Important Disclosures regarding Price Target Risks, Valuation Methodology, Regulation Analyst Certification,
Investment Banking, Ratings Definitions, and potential conflicts of interest begin on Page I of the Appendix Section.
800 Shades Creek Parkway
Suite 700
Birmingham, AL 35209
205-949-3500
Sterne, Agee & Leach Inc. is Member NYSE, FINRA, SIPC
Earnings Summary
FYE Dec
2009A
2010E
2011E
EPS & P/E Summary
2009A 2009 Previous
2010E 2010 Previous
2011E 2011 Previous
EPS:
Q1
$0.26
-
$0.20
$0.20
-
--
Q2
$0.30
-
$0.25
$0.28
-
--
Q3
$0.56
-
$0.70
$0.60
-
--
Q4
$1.36
$0.75
$1.10
$0.82
-
--
Full Year
$2.48
$1.80
$2.25
$1.90
$3.50
$3.00
P/E Ratio:
20.6
--
22.7
--
14.6
--
Fiscal Year Ends Dec
Rating:
Neutral
Price: Close
$51.09
Price Target:
$60
52-wk Range:
$18.34-$55.41
Market Capitalization (M):
$10,310
Shares Outstanding (M):
201.80
Avg. Daily Vol. (000):
2,016
Dividend:
$0.70
Dividend Yield:
1.37%
Consensus EPS Current Year:
$2.04
Consensus EPS Next Year:
$3.40
Est. 3-yr. EPS Growth:
12 - 14%
Ben Elias, CFA
Nicholas P. Heymann
(212) 338-4706
(212) 338-4703
belias@sterneagee.com
nheymann@sterneagee.com
February 3, 2010 | 12 Pages
CUMMINS, INC. (NYSE: CMI)
Re-Aligned Manufacturing
Unleashes
Operating
Leverage Beast on Modest Pre-Buy; What Do You Think
Happens when Demand Really Picks Up? Retain Neutral
n I think We’re Going Need a Bigger Boat - Cummins reported
4Q09 revenues and EPS of $3.4B and $1.36 vs. consensus
estimates of $2.8B and $0.78. Revenue upside was due to higher
than expected engine deliveries from the 4Q09 pre-buy, as well as
strong complementary sales in the Components segment.
Declines in Power Gen and Distribution were also lighter than
expected, with all segments growing sequentially. The more
significant outperformance came from the cost reductions and
manufacturing re-alignment that saw COGs as a percentage of
sales down ~350bp