Global power and hydrogen technologies provider Cummins (CMI) and energy firm Chevron U.S.A. have signed a memorandum of understanding (MOU) to collaborate on the development of alternative energy sources, including hydrogen.
Under the agreement, the companies will work together on four main objectives — exploring opportunities to make use of Cummins electrolyzer and fuel cell technologies at Chevron’s domestic refineries; developing infrastructure to enable the use of hydrogen for industry and fuel cell vehicles; building demand for hydrogen-powered commercial vehicles and industrial applications; and advancing public policy to promote the use of hydrogen as a decarbonizing solution for transportation and industry.
The President of Fuels & Lubricants at Chevron America, Andy Walz, said, “Hydrogen is just one lower-carbon solution we are investing in that will position our customers to reduce the carbon intensity of their businesses and everyday lives. We’ve also invested in developing and supplying renewable natural gas, blending renewables into our fuels, coprocessing biofeedstocks in our refineries, and abatement projects that will reduce the carbon intensity of our operations.”
On July 14, Deutsche Bank analyst Nicole DeBlase reiterated a Hold rating on the stock but lowered the price target from $262 to $255 (6.2% upside potential). In a research note to investors, the analyst said, “Expectations for the sector are much lower than they were three months ago, as the group has underperformed the S&P 500 by seven percentage points since the end of Q1 earnings.”
Overall, the stock has a Moderate Buy consensus based on 4 Buys and 8 Holds. The average Cummins price target of $289.80 implies 20.7% upside potential. Shares have gained 30.7% over the past year.
According to TipRanks’ Smart Score rating system, the company scores a 7 out of 10, suggesting that the stock is likely to perform in line with market averages.