Update shared on10 Sep 2025
Fair value Increased 2.07%Analysts have raised Cummins’ price target to $418.53, citing underestimated margin upside from large engine capacity expansion—particularly due to AI demand—alongside stronger execution and potential for multiple expansion.
Analyst Commentary
- Bullish analysts cite underappreciated revenue and margin potential from Cummins' capacity expansion in large engines, particularly driven by rising artificial intelligence demand.
- Multiple analysts highlight attractive valuation at current levels, suggesting room for multiple expansion as earnings estimates are revised upward.
- Improved operational execution and firmer industry fundamentals are contributing to increased optimism and higher price targets.
- Upward earnings estimate revisions, especially post-Q2 results, are driving positive outlooks and price target adjustments.
- Visibility for vehicle technology and mobility sectors appears stable, with expectations for auto suppliers like Cummins to beat near-term expectations.
What's in the News
- Cummins completed its 2019 buyback program, repurchasing 7,639,676 shares (5.27%) for $1,782.37 million; no shares repurchased in the most recent quarter.
- No shares were repurchased under the 2021 buyback program in the most recent quarter.
- The Board approved a 10% increase in the quarterly dividend, from $1.82 to $2.00 per share, marking the 16th consecutive annual increase.
Valuation Changes
Summary of Valuation Changes for Cummins
- The Consensus Analyst Price Target has risen slightly from $410.06 to $418.53.
- The Future P/E for Cummins has risen slightly from 16.86x to 17.21x.
- The Consensus Revenue Growth forecasts for Cummins remained effectively unchanged, moving only marginally from 6.3% per annum to 6.4% per annum.
Disclaimer
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