Using the industry peer median P/E multiple (trailing + forward), Cummins Inc. (CMI) has a fair value of $483.12 based on 8 comparable companies in the Industrial - Machinery industry.
USD in millions except Fair Price. Subject company highlighted.
| Mkt Cap ($M) | Trailing P/E | Forward P/E | |
|---|---|---|---|
| Cummins Inc.CMI | 73,820 | 26.0x | 26.0x |
| FedEx CorporationFDX | 83,775 | 20.9x | 17.9x |
| Illinois Tool Works Inc.ITW | 75,379 | 24.9x | 25.0x |
| CSX CorporationCSX | 74,010 | 25.8x | 21.6x |
| Norfolk Southern CorporationNSC | 63,453 | 22.2x | 23.2x |
| PACCAR IncPCAR | 60,701 | 25.6x | 22.9x |
| AMETEK, Inc.AME | 48,649 | 33.2x | 26.4x |
| United Rentals, Inc.URI | 47,250 | 19.2x | 17.2x |
| Roper Technologies, Inc.ROP | 37,972 | 24.8x | 19.3x |
| Industry Median | 24.9x | 22.2x | |
| (*) Profit after tax | 2,843 | 2,844 | |
| Equity Value | 70,758 | 63,261 | |
| (/) Outstanding shares | 139 | 139 | |
| Fair Price | $510 | $456 | |
This P/E relative valuation uses the industry peer median Price-to-Earnings ratio to estimate fair value. Both trailing (last 12 months) and forward (next fiscal year analyst estimates) P/E multiples are computed independently.
The industry median trailing P/E is applied to the company's TTM net income, and the forward P/E to analyst-estimated net income. Each produces an equity value divided by shares outstanding to yield a fair price per share. The selected fair value is the average of the trailing and forward legs.