A 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.
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