Update shared on28 Sep 2025
Fair value Increased 1.54%Analysts have raised Cummins’ price target to $424.98, citing underestimated revenue and margin potential from AI-driven engine expansion, recent operational improvements, and sustained sector strength, supporting a higher valuation outlook.
Analyst Commentary
- Bullish analysts highlight consensus underestimating Cummins’ revenue and margin potential from large engine capacity expansion driven by AI demand, with 2027 estimates materially above consensus.
- Operational improvements and the potential for valuation upside are identified as key catalysts supporting higher share prices.
- Upward earnings estimate revisions following strong Q2 results point to robust sector trends and greater visibility into future quarters.
- Attractive current valuation and the likelihood of further multiple expansion are seen as underpinning continued outperformance versus peers.
- Improved industry fundamentals and optimism in the vehicle technology and mobility sectors reinforce expectations for above-consensus performance by auto suppliers, including Cummins.
What's in the News
- Cummins and Komatsu, with Wabtec, signed an MOU to develop hybrid powertrains for mining equipment, supporting decarbonization and operational efficiency.
- Cummins, Clean Energy Fuels, and Hexagon Agility launched Pioneer Clean Fleet Solutions, offering comprehensive natural gas truck leasing to accelerate the adoption of low-carbon commercial vehicles.
- No shares were repurchased in the latest quarter; cumulative buyback under the 2019 program totals 7,639,676 shares (5.27%) for $1.78 billion.
- The Board increased the quarterly dividend by roughly 10%, 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 remained effectively unchanged, moving only marginally from $418.53 to $424.98.
- The Consensus Revenue Growth forecasts for Cummins has fallen slightly from 6.4% per annum to 6.1% per annum.
- The Future P/E for Cummins remained effectively unchanged, moving only marginally from 17.21x to 17.43x.
Disclaimer
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