Cummins Stock Claws Higher on BofA Bull Note

The security already sports an over 70% year-over-year lead

Digital Content Manager
May 17, 2021 at 10:33 AM
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The shares of engine manufacturer Cummins Inc. (NYSE:CMI) are up 1.2% at $268.80 this morning, after the company received an upgrade from BofA Global Research to “buy” from “neutral" with a $325 price target. The analyst in coverage expects continued outperformance for the equity, with additional estimate beats ahead, thanks to potential hydrogen and internal combustion engine wins.  

The security has been carving a channel of higher highs over the past year, culminating in a March 16, record high of $277. Though shares have cooled off slightly from that peak, the 100-day moving average remains a constant source of support, containing several of the stock's pullbacks. Longer term, CMI sports a 72.8% year-over-year lead.

Analysts were overwhelmingly skeptical towards Cummins stock coming into today, leaving plenty of room for additional upgrades going forward. Of the 16 in question, 12 carried a tepid "hold" rating, while the remaining four said "strong buy." Meanwhile, the equity's 12-month consensus price target of $288.84 is an 7.4% premium to current levels.

Now could be the perfect time to weigh in on CMI's next move with options. The security's Schaeffer's Volatility Index (SVI) of 23% sits in the low 6th percentile of its annual range, indicating option players are now pricing in low volatility expectations.

 

 

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