MODEL VERDICT
Cummins Inc. (CMI)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | NEUTRAL | 0.23 | $657.44 | CURRENT | — |
| Apr 24, 2026 | NEUTRAL | 0.23 | $660.75 | CURRENT | — |
| Apr 17, 2026 | NEUTRAL | 0.24 | $627.18 | CURRENT | — |
| Apr 16, 2026 | NEUTRAL | 0.24 | $601.27 | CURRENT | — |
| Apr 10, 2026 | NEUTRAL | 0.24 | $616.14 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 10 analyst estimates | $607.81 | -7.5% | 20% | A- | Analyst Est. |
| EV/EBITDA 9 industry peers | $608.23 | -7.5% | 20% | A- | Peer Data |
| Industry Median P/E 9 industry peers | $639.67 | -2.7% | 15% | A | Peer Data |
| Price / Free Cash Flow 9 industry peers | $346.92 | -47.2% | 15% | B+ | Peer Data |
| EV/EBIT 9 industry peers | $616.49 | -6.2% | 8% | B+ | Peer Data |
| EV/FCF 9 industry peers | $293.41 | -55.4% | 7% | B | Model Driven |
| Peg Ratio 7 industry peers | $389.10 | -40.8% | 5% | B | Data |
| EV To Revenue 10 industry peers | $540.76 | -17.7% | 4% | B | Data |
| Price / Sales 10 industry peers | $580.74 | -11.7% | 3% | B | Model Driven |
| Earnings Yield 9 industry peers | $639.67 | -2.7% | 2% | B | Data |
| FCF Yield 9 industry peers | $346.92 | -47.2% | 1% | B | Data |
| Weighted Output Blended model output | $555.37 | -15.5% | 100% | 86 | OVERVALUED |
| EPS Growth ↓ | P/E Multiple → | 26× | 29× | 32× (Current) | 35× | 38× |
|---|---|---|---|---|---|
| Bear Case (5%) | $557 | $621 | $686 | $750 | $814 |
| Conservative (7%) | $572 | $638 | $704 | $770 | $836 |
| Base Case (11.3%) | $593 | $662 | $730 | $799 | $867 |
| Bull Case (15%) | $614 | $685 | $756 | $827 | $897 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 20.85 | 16.02 | 12.29 | 46.52 | 12.13 |
| EV/EBIT | 13.89 | 13.50 | 10.08 | 19.60 | 3.60 |
| EV/EBITDA | 11.70 | 11.30 | 8.80 | 14.78 | 2.12 |
| P/FCF | 42.55 | 21.65 | 11.61 | 173.80 | 58.46 |
| P/FFO | 13.36 | 11.75 | 9.53 | 19.44 | 3.94 |
| P/TBV | 6.12 | 6.64 | 4.41 | 7.85 | 1.43 |
| P/AFFO | 23.63 | 17.08 | 12.75 | 62.61 | 17.77 |
| P/B Ratio | 3.83 | 3.45 | 3.30 | 5.28 | 0.72 |
| Div Yield | 0.02 | 0.02 | 0.01 | 0.03 | 0.00 |
| P/S Ratio | 1.42 | 1.32 | 1.00 | 2.10 | 0.37 |
Based on our peer multiples analysis with 28 valuation metrics, the model estimates CMI's fair value at $555.37 vs the current price of $657.44, implying -15.5% downside potential. Model verdict: Overvalued. Confidence: 86/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $555.37 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $452.12 (P10) to $627.45 (P90), with a median of $527.10.
CMI's current P/E of 32.1x compares to the industry median of 31.2x (9 peers in the group). This represents a +2.8% premium to the industry. The historical average P/E is 20.8x over 7 years. Signal: Fair Value.
51 analysts cover CMI with a consensus rating of Buy. The consensus price target is $621.10 (range: $540.00 — $730.00), implying -5.5% upside from the current price. Grade breakdown: Strong Buy (0), Buy (26), Hold (24), Sell (1), Strong Sell (0).
The model confidence score is 86/100, based on: data completeness (30), peer quality (25), historical depth (20), earnings stability (4), and model agreement (7). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Multiple compression: CMI trades at the 4580th percentile of its historical P/E range. A reversion to median (20.8×) would imply significant downside. (2) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that CMI's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of +0.1σ, meaning margins are 0.1 standard deviations above their historical average. If margins revert to the 7-year mean (11.7%), the model estimates fair value drops by 1030.0% to approximately $590. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.