Cummins, the Industrials sector company, was revisited by a Wall Street analyst yesterday. Analyst Steven Fisher from UBS upgraded the rating on the stock to a Hold and gave it a $500.00 price target.
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Steven Fisher has given his Hold rating due to a combination of factors affecting Cummins’ performance and market conditions. The truck cycle is expected to bottom out in 2026, with a potential recovery in 2027 driven by data centers and a resurgence in the truck market. However, the current stock price already reflects this anticipated growth, suggesting limited upside potential in the near term.
Despite Cummins’ strong management through the downturn and the power generation segment’s ability to offset weaknesses in the truck market, there are still downside risks. These include potential further declines in the truck market and margin pressures. Additionally, while there is some optimism for a cyclical recovery due to upcoming EPA emissions regulations, the consensus may be overly optimistic about the pace of recovery. As a result, Fisher sees the risk/reward balance as more neutral, justifying the Hold rating.
In another report released on November 11, Barclays also maintained a Hold rating on the stock with a $515.00 price target.