Cummins (CMI)
NYSE:CMI
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Cummins
(NYSE:CMI)
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Rating:67Neutral
Price Target:
$587.00
â–¼(-5.06% Downside)
Action:DowngradedDate:02/06/26
The score is led by solid fundamentals (strong recent growth, improving leverage, and a rebound in free cash flow) and a supportive earnings outlook (positive 2026 guidance and strong segment profitability in Power Systems/Distribution). Offsetting this are weaker near-term technical momentum, an elevated P/E with a modest dividend yield, and cyclical headwinds highlighted on the call (NA truck weakness, tariffs, and Accelera losses).
Positive Factors
Cash generation and conversion
Sustained operating cash flow (~$3.6B TTM) and a meaningful free cash flow rebound (~$2.4B) support durable capital allocation: funding capex, dividends, buybacks, and deleveraging without relying on external financing. Strong cash conversion also buffers the business through cyclical revenue swings.
Negative Factors
Accelera (electrolyzer) losses and charges
Persistent Accelera losses and sizable one-time and ongoing charges strain reported profitability and cash. Continued losses require management attention and potential incremental capital or restructurings, which dilute returns and can distract from core business execution over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation and conversion
Sustained operating cash flow (~$3.6B TTM) and a meaningful free cash flow rebound (~$2.4B) support durable capital allocation: funding capex, dividends, buybacks, and deleveraging without relying on external financing. Strong cash conversion also buffers the business through cyclical revenue swings.
Read all positive factors
Cummins (CMI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$85.13B
Dividend Yield1.48%
Average Volume (3M)804.57K
Price to Earnings (P/E)24.8
Beta (1Y)1.16
Revenue Growth-1.78%
EPS Growth27.35%
CountryUS
Employees69,600
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)5.84
Shares Outstanding138,165,470
10 Day Avg. Volume646,464
30 Day Avg. Volume804,572
Financial Highlights & Ratios
PEG Ratio-0.89
Price to Book (P/B)5.70
Price to Sales (P/S)2.09
P/FCF Ratio29.50
Enterprise Value/Market Cap1.06
Enterprise Value/Revenue2.68
Enterprise Value/Gross Profit10.61
Enterprise Value/Ebitda16.77
Forecast
1Y Price Target
$633.82Price Target Upside2.51% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)26.23
Revenue Forecast (FY)$35.69B
Cummins Business Overview & Revenue Model
Company Description
Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, electric and hybrid powertrains, and related components worldwide. It operates through five segments: Engine, Distribution, Components, Power Systems, an...
How the Company Makes Money
Cummins generates revenue through several key streams, primarily derived from the sale of engines and related components across diverse markets, including automotive, industrial, and power generation sectors. The Engine segment is a significant co...
Cummins Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where Cummins is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where Cummins is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyCummins Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call highlights strong underlying operational performance and record adjusted profitability driven by Power Systems and Distribution, successful product launches, capacity expansions, solid cash generation, and constructive 2026 guidance (revenues +3–8% and EBITDA ~17–18%). Offsetting these positives are pronounced demand weakness in North America heavy/medium truck markets, significant restructuring charges and ongoing losses in Accelera (electrolyzer), and ongoing tariff-related margin dilution and regional market uncertainty (China, India). On balance, the strength in core businesses, record adjusted margins, clear actions to reduce Accelera costs, and positive guidance outweigh the lowlights.Positive Updates
Record Adjusted EBITDA and Margin Expansion
Excluding one-time items, 2025 adjusted EBITDA was a record $5.8 billion or 17.4% of sales (vs. 15.7% in 2024). Fourth quarter adjusted EBITDA was $1.4 billion or 16.0% (vs. 15.8% a year ago).
Negative Updates
North America Heavy & Medium-Duty Truck Weakness
Significant weakness in North America truck markets: combined North America heavy and medium-duty truck engine volume declined 30% in Q4. Full-year engine segment revenues were $10.9 billion, down 7% year-over-year.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Adjusted EBITDA and Margin Expansion
Excluding one-time items, 2025 adjusted EBITDA was a record $5.8 billion or 17.4% of sales (vs. 15.7% in 2024). Fourth quarter adjusted EBITDA was $1.4 billion or 16.0% (vs. 15.8% a year ago).
Read all positive updates
Company Guidance
Cummins guided 2026 company revenues up 3%–8% with EBITDA of roughly 17%–18% of sales (including tariff dilution), an effective tax rate around 24%, and capital expenditures of $1.35–$1.45 billion; segment guidance included Engine revenues flat–+5% (EBITDA 12%–13%), Components flat–+5% (EBITDA 13%–14%), Distribution +5%–10% (EBITDA 13.25%–14.25%), Power Systems +12%–17% (EBITDA 23%–24%), and Accelera revenues $300M–$350M with net losses narrowing to $325M–$355M. Management’s market assumptions: North America heavy‑duty production 220k–240k and medium‑duty 110k–120k (both flat to +10%), N.A. pickup engine shipments 125k–140k (‑5% to +5%), China revenues (incl. JVs) ~‑1% with HD/MD down 10%–flat, India revenues (incl. JVs) down ~5%, power‑generation revenues +10%–20%, mining engines flat–+10%, and aftermarket +2%–8%; they also noted tariffs are a dilutive headwind (about ~50 basis points) and reiterated a goal to return at least 50% of operating cash flow to shareholders.Cummins Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
73
Positive
Cash Flow
70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 33.67B | 34.10B | 34.06B | 28.07B | 24.02B |
| Gross Profit | 8.52B | 8.44B | 8.25B | 6.72B | 5.70B |
| EBITDA | 5.38B | 6.34B | 3.02B | 3.80B | 3.52B |
| Net Income | 2.84B | 3.95B | 735.00M | 2.15B | 2.13B |
Balance Sheet | |||||
| Total Assets | 33.99B | 31.54B | 32.01B | 30.30B | 23.71B |
| Cash, Cash Equivalents and Short-Term Investments | 3.61B | 2.26B | 2.74B | 2.57B | 3.19B |
| Total Debt | 8.11B | 7.60B | 7.21B | 8.36B | 4.61B |
| Total Liabilities | 20.58B | 20.23B | 22.10B | 20.07B | 14.31B |
| Stockholders Equity | 12.35B | 10.27B | 8.85B | 8.97B | 8.47B |
Cash Flow | |||||
| Free Cash Flow | 2.39B | 279.00M | 2.75B | 1.05B | 1.47B |
| Operating Cash Flow | 3.62B | 1.49B | 3.97B | 1.96B | 2.26B |
| Investing Cash Flow | -1.84B | -1.78B | -1.64B | -4.17B | -873.00M |
| Financing Cash Flow | -662.00M | -173.00M | -2.18B | 1.67B | -2.23B |
Cummins Technical Analysis
Positive
618.28
Price Trends
568.98
Positive
545.97
Positive
470.50
Positive
Market Momentum
11.78
Negative
69.58
Neutral
96.74
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CMI, the sentiment is Positive. The current price of 618.28 is above the 20-day moving average (MA) of 555.76, above the 50-day MA of 568.98, and above the 200-day MA of 470.50, indicating a bullish trend. The MACD of 11.78 indicates Negative momentum. The RSI at 69.58 is Neutral, neither overbought nor oversold. The STOCH value of 96.74 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CMI.
Cummins Risk Analysis
Cummins disclosed 32 risk factors in its most recent earnings report. Cummins reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cummins Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $124.23B | 32.82 | 25.65% | 0.79% | 0.22% | 26.66% | |
77 Outperform | $14.92B | 25.94 | 12.11% | 1.56% | 7.09% | -2.29% | |
76 Outperform | $156.36B | 30.24 | 21.67% | 1.29% | 8.24% | 6.21% | |
74 Outperform | $101.31B | 54.93 | 29.67% | 0.21% | 9.70% | 36.28% | |
70 Outperform | $33.44B | 54.24 | 5.70% | 0.10% | 4.20% | -34.47% | |
67 Neutral | $85.13B | 24.76 | 24.13% | 1.48% | -1.78% | 27.35% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
CMI
Cummins
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336.17
119.16%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.