During recent trading sessions, Cummins, Inc. (Symbol: CMI) has seen its share price soar past the average analyst 12-month target price of $263.25, reaching $265.80 per share. When a stock transcends the target set by analysts, these experts typically have two options: either downgrade the stock based on valuation concerns, or adjust their target price upward to reflect the stock’s strength. The analysts’ reactions are also influenced by fundamental business developments which are propelling the stock price higher. If the prospects look promising for the company, then it may be the right time to raise the target price.
Cummins, Inc. has garnered a total of 12 different analyst targets within the Zacks coverage universe, contributing to the aforementioned average. However, it’s important to note that the average price target is just that – a mathematical average. There are analysts who set lower targets than the average, one of which is as low as $235.00, while on the other end of the spectrum, a single analyst has set a lofty target of $290.00. The standard deviation stands at $19.489.
The purpose of considering the average CMI price target is to tap into the “wisdom of crowds”, combining the inputs of all individual analysts to determine the ultimate number, rather than relying solely on the opinion of a particular expert. With CMI surpassing this average target price of $263.25 per share, investors are given a strong signal to reassess the company and weigh for themselves whether $263.25 is just a stepping stone to an even higher target, or if the valuation has become stretched to the point where taking profits might be prudent.
| Recent CMI Analyst Ratings Breakdown | ||||
|---|---|---|---|---|
| » | Current | 1 Month Ago | 2 Month Ago | 3 Month Ago |
| Strong buy ratings: | 3 | 3 | 3 | 4 |
| Buy ratings: | 1 | 1 | 0 | 0 |
| Hold ratings: | 9 | 9 | 9 | 8 |
| Sell ratings: | 1 | 0 | 0 | 0 |
| Strong sell ratings: | 1 | 1 | 1 | 1 |
| Average rating: | 2.7 | 2.61 | 2.69 | 2.54 |
The average rating provided in the last row of the above table ranges from 1 (Strong Buy) to 5 (Strong Sell). The data in this article is sourced from Zacks Investment Research via Quandl.com. Access the latest Zacks research report on CMI for free.
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The views and opinions expressed here represent the author’s own views and opinions, and do not necessarily reflect those of Nasdaq, Inc.
