UPDATE: Goldman Sachs Upgrades Cummins to Conviction Buy on New Product Cycle

Goldman Sachs upgraded Cummins CMI from Buy to Conviction Buy and maintained a $144.00 price target. Goldman Sachs said, "We add CMI to the Americas Conviction Buy List with 30% total return upside to our 12-month $144 price target ahead of what we see as the strongest new product cycle in Machinery. We expect contract awards in the coming months to provide visibility on over $1 bn of new product sales in 2014, driving over $1 of EPS upside to consensus 2014 estimates and full cycle earnings power. We also believe CMI's core global truck markets are in the early stages of recovery, consensus 2013 margin expectations are beatable as production rises off trough 1Q levels, and valuation risk-reward is compelling with the stock trading at less than 10x 2014 P/E (6x EV/EBITDA)." Cummins closed at $112.79 on Friday.