Cummins’ Q2 Results Show Demand for Products Remains Solid, Despite Weakness in China

Narrow-moat-rated Cummins reported solid second-quarter results. We raised our fair value estimate to $241 from $238 previously, largely due to the time value of money since our last update. Our fair value increase also accounts for slight tweaks to our 2022 sales expectations based on guidance provided by the company. We forecast the company’s sales and margins for the full year to come in slightly below management’s guidance, which calls for 8% top-line growth and 15.5% EBITDA margins.