Cummins? Motor is Roaring

[Stocks-to-Watch]

Engine-maker Cummins (CMI) benefited from strong truck sales in North America, which helped push earnings up 51% year over and allowed the company to surpass analysts’ expectations. Shares rose 7% in late trading.

Cummins posted $2.56 of EPS, 32 cents ahead of analysts’ expectations. Heavy-duty truck engine sales rose 68%.

“We expect CMI to continue to gain market share and grow faster than its underlying markets do,” wrote Standard & Poor’s equity analyst Jim Corridore.* “We raise our 2012 EPS forecast to $10.13 from $9.98 and our 12-month target price to $152 from $145, 15 times our 2012 estimate, the middle of its historical P/E range. We view CMI’s strong balance sheet, good cash generation and 1.4% dividend yield as additional positives.”



Original Article Source by Barrons.com