Using the PEG framework with analyst consensus forward EPS growth of 21.3% plus 1.4% dividend yield, Cummins Inc. has a fair value of $558.87 based on NTM EPS (FY2026) of $26.22. The current PEG ratio is 0.95.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG is most informative for high-growth companies — the PEG sweet spot.
| EPS Growth RateForward | 19.9% |
| Dividend Yield | +1.4% |
| Adjusted Growth (clamped 8–25%) | 21.3% |
| Fair P/E | 21.3x |
| NTM EPS (FY2026) | $26.22 |
| Fair Value | $558.87 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $20.50 | — | — |
| FY2026E | $26.22 | +27.9% | 14 |
| FY2027E | $31.16 | +18.9% | 14 |
| FY2028E | $35.32 | +13.3% | 9 |
3Y Forward EPS CAGR: 19.9%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $2.1B | $14.61 | — |
| FY2022 | $2.2B | $15.12 | +3.5% |
| FY2023 | $735.0M | $5.15 | -65.9% |
| FY2024 | $3.9B | $28.37 | +450.9% |
| FY2025 | $2.8B | $20.50 | -27.7% |
4Y Historical EPS CAGR: 8.8%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.