Hydrogen Engines, Data Center Power Demand Might Change The Case For Investing In Cummins (CMI)

• Cummins recently reported a 2% third-quarter sales decline as softer North American truck demand was offset by solid global power generation and light-duty truck markets, while also advancing a prototype hydrogen-powered internal combustion engine for intercity buses with lower emissions.
• At the same time, rising interest in Cummins’ Accelera business, focused on green hydrogen and hybrid powertrains, reflects how cleaner power solutions and stricter environmental rules are becoming more central to the company’s growth story.
• Next, we’ll examine how strong data center-driven power demand and Cummins’ hydrogen engine progress interact with its existing investment narrative.

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Cummins Investment Narrative Recap

To own Cummins, you need to believe its core engine and components business can weather cyclical truck weakness while newer power systems and low‑carbon technologies gradually take on more weight. The latest results, with softer North American truck demand but resilient power generation and data center orders, do not materially change that narrative, though they highlight that ongoing truck softness remains the most immediate risk while power demand remains a key short term support.

The partnership to test a hydrogen powered internal combustion engine in an intercity bus ties directly into Cummins’ Accelera push into green hydrogen and hybrid powertrains, which is attracting fresh investor attention. This keeps the long term decarbonization catalyst in focus, even as Accelera is still not a meaningful profit contributor and faces the risk of slower growth and continued EBITDA losses if adoption of zero emission technologies falls short of expectations.

Yet for investors, the real concern may be how prolonged weakness in North American heavy truck demand could...

Read the full narrative on Cummins (it's free!)

Cummins' narrative projects $40.6 billion revenue and $4.3 billion earnings by 2028. This requires 6.4% yearly revenue growth and about a $1.4 billion earnings increase from $2.9 billion today.

Uncover how Cummins' forecasts yield a $510.05 fair value, in line with its current price.

Exploring Other Perspectives

Five fair value estimates from the Simply Wall St Community span roughly US$280 to about US$639, showing how widely opinions on Cummins can differ. As you weigh those views, keep in mind that recent results again underline how weakness in North American heavy and medium duty truck demand remains a key swing factor for Cummins’ earnings and for how the market might reassess its core engine business.

Explore 5 other fair value estimates on Cummins - why the stock might be worth 45% less than the current price!

Build Your Own Cummins Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Cummins research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free Cummins research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Cummins' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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