Melius Research upgraded Cummins (CMI) to Buy from Hold with a $500 price target which offers 25% upside from current share levels. The firm sees “three ways to win” for investors: Cummins continuing to improve operationally, valuation upside, and consensus estimates underestimating the company’s revenue and margin potential from capacity expansion in large engines, driven by artificial intelligence demand. Melius’ 2027 estimates are 13% above consensus. It believes Cummins’ revenue potential from AI is larger than the consensus currently forecasts.
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