Shares of Cummins Inc. climbed on Monday after a Goldman Sachs analyst added the diesel engine maker to a list of favorite stocks, saying the company is poised to benefit from demand in emerging economies.
Shares rose $1.12, or 2.6 percent, to $44.82 in morning trading.
Jerry Revich on Monday added the stock to Goldman's "Conviction Buy List." He assigned a price target of $60, reflecting an upside of 37 percent over the stock's Friday closing price of $43.70.
The company's fourth-quarter earnings, scheduled for Feb. 2, should indicate increasing truck and power generation demand in industrializing economies in Asia and in Brazil, Revich wrote in a note to investors. In addition, off-highway product announcements should propel further share growth, while U.S. freight demand is likely to begin increasing again by the second quarter of 2010, he said.
In late October, Cummins said third-quarter profit plunged 60 percent. Sales fell at least 25 percent in all four of the company's operating segments, with the largest declines in its power generation and engines segments. The company said the businesses would remain stifled for some time.
Shares of Cummins have traded between $18.34 and $51.65 over the last 52 weeks.