Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowA bold outlook from Cummins Inc. solidified Wall Street's positive outlook for the engine maker in Tuesday trading.
Cummins Chairman and CEO Tim Solso said Tuesday that 2011 would be a record year for the Columbus manufacturer. Company officials set a goal of $30 billion in sales in 2015 and said they expect Cummins to grow at an annual rate of about 14 percent to reach that target.
Cummins shares rose 6 percent Tuesday after the news, closing at $92.20 each. They continued to climb Wednesday, rising to $93.28 by midday.
Citigroup Inc. stock analyst Timothy Thein said he liked several things he heard during the Solso's presentation, including higher-than-expected long-term profit targets and cost-cutting plans.
"Getting there of course is another issue, but Cummins' most recent performance relative to its last target certainly adds credibility," Thein wrote in a Wednesday note to investors. "Plus, its already well-established position in attractive growth markets and tailwind from clearly-visible secular drivers also help to engender confidence, in our view."
In addition to backing a previous "Buy" rating, Thein stuck by his $115 price target for the company.
Ben Elias of Sterne Agee cut his price target for Cummins by $13, to $143, noting that that growth in the commercial vehicle industry is tough to predict and can sometimes be a bumpy road. But he said the company has proven in the past that it can meet its financial targets.
"We view Cummins as a very conservative and deliberate company and thus look at today's 'long-term' targets, as very tangible, and readily achievable," Elias wrote in a note backing his "Buy" rating.
Please enable JavaScript to view this content.