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DCF Valuation
Base-case fair value
$427.96
Intrinsic $570.61 · 25% MOS
Current price: $659.58
Base-case summary
Our base-case DCF for Cummins Inc (CMI) projects 10 years of free cash flow growth at 11.9% for years 1–5 and 6.0% for years 6–10, anchored to 11.9% historical FCF growth, then applies a 2.5% perpetual growth rate and a 8.0% discount rate. Starting from $2.7B in trailing free cash flow, this produces an intrinsic value of $570.61 per share. A 25% safety margin gives a fair value of $427.96, suggesting the stock is currently 35% overvalued against the $659.58 market price.
See 3 scenarios side by side
Conservative, Base, and Optimistic fair values, plus the sensitivity matrix and FCF history. Free account.
Model inputs
TTM Free Cash Flow
$2.7B
Cash & equivalents
$3.2B
Total debt
$7.9B
Shares outstanding
139M