Cummins EPA settlement doubled expectations, says Citi

Citi keeps a Buy rating on Cummins with a $265 price target after the company reached an agreement in principle on a longstanding issue with the Environmental Protection Agency and other regulatory bodies regarding emissions certification and compliance processes on engines used primarily in pickup trucks. While difficult to quantify, the $2.04B charge is roughly double what Citi found to be consensus expectations, the analyst tells investors in a research note. The firm says that while the cost was higher than expected, the settlement removes an overhang on shares of Cummins.