Thanks. Apparently I'm not alone in my thinking - note S&P also uses 15X as the middle of the historical P/E range:
S&P REITERATES STRONG BUY OPINION ON SHARES OF CUMMINS INC. 2 days 14 minutes ago - Standard & Poor's Q4 operating EPS of $2.56, vs. $1.84, beats our $2.23 estimate. CMI did a good job leveraging incremental revenues to increase EBIT margins. For 2012, CMI guides to 10% revenue growth with a 12.5%-13.5% EBIT margin. We expect CMI to continue to gain market share and grow faster than its underlying markets do. We raise our '12 EPS forecast to $10.13 from $9.98 and our 12-month target price to $152 from $145, 15X our '12 estimate, the middle of its historical P/E range. We view CMI's strong balance sheet, good cash generation and 1.4% dividend yield as additional positives.
Fact? You're the one who didn't even know that the P/E was at 14 and said it would never support a P/E of 12. Nice research - you don't even know the metrics of the stock you're claiming to be know so well, so pardon me for being extremely underwhelmed with your opinion.
hows that working out for you? remember...CMI make the engines that run power big and small engines on natural gas...which is ultra cheap...saves truckers money...they have a long list of products...the best being truckers...that run nat gas engines that can switch to other forms of fuel as needed...See CLNE...they make the stations that fill up these rigs...long term play...we have tons of Nat Gas in this country ...and is much cleaner source of energy....they had a blew away the numbers for the quarter....the nat gas play is JUST beginning for a source of fuel...is so cheap and abundant...good luck all