It's turning out to be a rough year for Cummins (NYSE:CMI) investors. The stock hit a new 52-week low last week, after losing as much as 12% since the engine maker reported its third-quarter numbers in late October.
A trifecta of bad news hit Cummins shares: weak Q3 numbers, a disappointing outlook, and restructuring announcements that point to tougher times ahead. Just weeks before Cummins reported, Caterpillar (NYSE:CAT) had warned of a slowdown when it slashed its outlook and forward guidance. But investors perhaps weren't expecting Cummins to take as big a hit, given Caterpillar's greater exposure to vulnerable end markets such as mining and energy.
However, Cummins' third-quarter report revealed several concerns that are hard to ignore. That explains why analysts are cautious, with Morgan Stanley even rating Cummins stock a sell with a price target of $79, representing roughly a 20% downside from the current price, as of this writing.
While it's difficult to predict a price point, the following slideshow highlights the three biggest hurdles that could hurt Cummins' growth prospects going forward. Take a look.
Neha Chamaria has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Cummins. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.