Price to Earnings (P/E)
since 2005
Calculation
Cummins Inc., P/E, long-term trends, calculation
| P/E | = | Share price1, 2, 3 | ÷ | Earnings per share1 (EPS) | EPS1 | = | Net income attributable to Cummins Inc.1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 12, 2024 | 49.57 | = | 256.85 | ÷ | 5.18 | 5.18 | = | 735 | ÷ | 141,856,847 | |
| Feb 14, 2023 | 16.33 | = | 248.41 | ÷ | 15.21 | 15.21 | = | 2,151 | ÷ | 141,375,256 | |
| Feb 8, 2022 | 14.94 | = | 223.51 | ÷ | 14.96 | 14.96 | = | 2,131 | ÷ | 142,426,735 | |
| Feb 10, 2021 | 20.23 | = | 245.11 | ÷ | 12.12 | 12.12 | = | 1,789 | ÷ | 147,657,584 | |
| Feb 11, 2020 | 10.92 | = | 164.30 | ÷ | 15.04 | 15.04 | = | 2,260 | ÷ | 150,269,665 | |
| Feb 11, 2019 | 10.89 | = | 148.18 | ÷ | 13.61 | 13.61 | = | 2,141 | ÷ | 157,338,874 | |
| Feb 14, 2018 | 27.53 | = | 166.00 | ÷ | 6.03 | 6.03 | = | 999 | ÷ | 165,683,334 | |
| Feb 13, 2017 | 18.44 | = | 152.85 | ÷ | 8.29 | 8.29 | = | 1,394 | ÷ | 168,155,330 | |
| Feb 12, 2016 | 12.09 | = | 97.01 | ÷ | 8.03 | 8.03 | = | 1,399 | ÷ | 174,320,797 | |
| Feb 17, 2015 | 15.32 | = | 138.98 | ÷ | 9.07 | 9.07 | = | 1,651 | ÷ | 181,945,783 | |
| Feb 18, 2014 | 18.01 | = | 143.10 | ÷ | 7.94 | 7.94 | = | 1,483 | ÷ | 186,682,826 | |
| Feb 20, 2013 | 13.25 | = | 114.83 | ÷ | 8.66 | 8.66 | = | 1,645 | ÷ | 189,844,829 | |
| Feb 21, 2012 | 12.81 | = | 123.30 | ÷ | 9.63 | 9.63 | = | 1,848 | ÷ | 191,927,547 | |
| Feb 24, 2011 | 19.19 | = | 100.87 | ÷ | 5.26 | 5.26 | = | 1,040 | ÷ | 197,847,368 | |
| Feb 26, 2010 | 26.71 | = | 56.78 | ÷ | 2.13 | 2.13 | = | 428 | ÷ | 201,359,036 | |
| Feb 27, 2009 | 5.55 | = | 20.80 | ÷ | 3.75 | 3.75 | = | 755 | ÷ | 201,352,073 | |
| Feb 26, 2008 | 14.61 | = | 53.40 | ÷ | 3.65 | 3.65 | = | 739 | ÷ | 202,192,548 | |
| Feb 27, 2007 | 9.92 | = | 34.04 | ÷ | 3.43 | 3.43 | = | 715 | ÷ | 208,398,444 | |
| Feb 28, 2006 | 9.15 | = | 27.07 | ÷ | 2.96 | 2.96 | = | 550 | ÷ | 185,823,756 |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Cummins Inc. Annual Report.
The financial trajectory from 2006 to 2024 is characterized by a substantial long-term appreciation in share price, which increased from 27.07 USD to 256.85 USD. However, this growth has been accompanied by significant volatility in earnings per share (EPS) and consequent fluctuations in the Price to Earnings (P/E) ratio, indicating varying levels of market valuation relative to actual profitability over the period.
- Share Price and Earnings Trends
- A general upward trend in share price is observed, although it was interrupted by notable contractions in 2009 and 2016. Earnings per share exhibited a consistent growth pattern from 2006 through 2023, peaking at 15.21 USD. A significant reversal occurred in 2024, where EPS dropped sharply to 5.18 USD, despite the share price reaching its historical peak of 256.85 USD.
- P/E Ratio Volatility and Valuation Shifts
- The P/E ratio has displayed extreme instability, reflecting periods of both undervaluation and aggressive pricing. A notable low occurred in 2009 with a ratio of 5.55, followed by a rapid surge to 26.71 in 2010 as the share price recovered faster than earnings. Between 2011 and 2020, the ratio generally fluctuated between 10 and 20, suggesting a period of relative valuation stability.
- Analysis of Recent Divergence
- A critical divergence is evident in the 2024 data. The P/E ratio spiked to 49.57, the highest in the analyzed period. This outlier is the result of a decoupling between market price and earnings; while the share price remained at a record high, the precipitous decline in EPS created a valuation multiple that significantly exceeds historical norms.
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Comparison to Competitors
Cummins Inc., P/E, long-term trends, comparison to competitors
| Cummins Inc. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|---|---|---|
| Feb 12, 2024 | 49.57 | — | 15.55 | 35.88 | 16.18 | 22.73 | 15.35 | 38.31 |
| Feb 14, 2023 | 16.33 | — | 19.15 | 27.93 | — | 26.97 | 20.48 | 27.59 |
| Feb 8, 2022 | 14.94 | — | 16.82 | 27.77 | — | 23.14 | 16.70 | 36.79 |
| Feb 10, 2021 | 20.23 | — | 36.80 | 37.46 | 19.67 | 29.63 | 13.44 | — |
| Feb 11, 2020 | 10.92 | — | 12.36 | 18.06 | — | 20.97 | 19.87 | 24.41 |
| Feb 11, 2019 | 10.89 | 21.87 | 12.42 | 15.92 | — | 16.02 | 16.88 | 19.74 |
| Feb 14, 2018 | 27.53 | 24.68 | 126.80 | 11.90 | — | 67.20 | 48.70 | 21.97 |
| Feb 13, 2017 | 18.44 | 20.50 | — | 16.96 | 32.22 | 19.29 | 14.14 | 17.55 |
| Feb 12, 2016 | 12.09 | 14.89 | 18.07 | 13.17 | — | 16.70 | 18.36 | 9.31 |
| Feb 17, 2015 | 15.32 | 19.15 | 14.01 | 18.73 | 17.17 | 19.27 | 16.86 | 17.52 |
| Feb 18, 2014 | 18.01 | 21.10 | 16.25 | 19.35 | 19.59 | 18.91 | 17.56 | 17.51 |
| Feb 20, 2013 | 13.25 | 14.71 | 11.02 | 23.99 | 17.57 | 18.78 | 10.34 | 16.07 |
| Feb 21, 2012 | 12.81 | 14.09 | 15.11 | 12.83 | 15.52 | 22.54 | 10.81 | 15.29 |
| Feb 24, 2011 | 19.19 | 16.17 | 24.14 | 19.59 | 19.49 | 22.48 | 9.58 | 17.84 |
| Feb 26, 2010 | 26.71 | 33.40 | 40.66 | 29.60 | 16.09 | 13.44 | 9.56 | 16.33 |
| Feb 27, 2009 | 5.55 | 11.63 | 4.51 | 5.65 | 6.62 | 8.71 | 8.47 | 9.57 |
| Feb 26, 2008 | 14.61 | 15.99 | 12.54 | 11.89 | 15.45 | 17.07 | 14.15 | 16.61 |
| Feb 27, 2007 | 9.92 | 32.40 | 12.28 | 12.47 | 17.11 | 18.37 | 16.95 | 18.16 |
| Feb 28, 2006 | 9.15 | 22.62 | 17.17 | 12.82 | 21.07 | 20.71 | 17.45 | 18.76 |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Sector (Capital Goods)
Cummins Inc., P/E, long-term trends, comparison to sector (capital goods)
| Cummins Inc. | Capital Goods | |
|---|---|---|
| Feb 12, 2024 | 49.57 | 25.10 |
| Feb 14, 2023 | 16.33 | 40.21 |
| Feb 8, 2022 | 14.94 | 57.31 |
| Feb 10, 2021 | 20.23 | 123.55 |
| Feb 11, 2020 | 10.92 | 39.03 |
| Feb 11, 2019 | 10.89 | 56.00 |
| Feb 14, 2018 | 27.53 | 55.16 |
| Feb 13, 2017 | 18.44 | 23.62 |
| Feb 12, 2016 | 12.09 | 33.10 |
| Feb 17, 2015 | 15.32 | 17.47 |
| Feb 18, 2014 | 18.01 | 18.85 |
| Feb 20, 2013 | 13.25 | 15.74 |
| Feb 21, 2012 | 12.81 | 15.20 |
| Feb 24, 2011 | 19.19 | 18.46 |
| Feb 26, 2010 | 26.71 | 17.22 |
| Feb 27, 2009 | 5.55 | 7.48 |
| Feb 26, 2008 | 14.61 | 15.28 |
| Feb 27, 2007 | 9.92 | 17.63 |
| Feb 28, 2006 | 9.15 | 20.11 |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Industry (Industrials)
Cummins Inc., P/E, long-term trends, comparison to industry (industrials)
| Cummins Inc. | Industrials | |
|---|---|---|
| Feb 12, 2024 | 49.57 | 24.85 |
| Feb 14, 2023 | 16.33 | 36.06 |
| Feb 8, 2022 | 14.94 | 35.59 |
| Feb 10, 2021 | 20.23 | — |
| Feb 11, 2020 | 10.92 | 43.95 |
| Feb 11, 2019 | 10.89 | 33.70 |
| Feb 14, 2018 | 27.53 | 29.83 |
| Feb 13, 2017 | 18.44 | 22.92 |
| Feb 12, 2016 | 12.09 | 22.89 |
| Feb 17, 2015 | 15.32 | 18.79 |
| Feb 18, 2014 | 18.01 | 19.13 |
| Feb 20, 2013 | 13.25 | 17.77 |
| Feb 21, 2012 | 12.81 | 15.75 |
| Feb 24, 2011 | 19.19 | 18.72 |
| Feb 26, 2010 | 26.71 | 19.17 |
| Feb 27, 2009 | 5.55 | 9.73 |
| Feb 26, 2008 | 14.61 | 16.93 |
| Feb 27, 2007 | 9.92 | 11.65 |
| Feb 28, 2006 | 9.15 | 50.62 |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).