Barclays lifts Cummins stock price target to $381 from $310

On Wednesday, Barclays (LON:BARC) analyst Adam Seiden increased the price target for Cummins Inc . (NYSE:CMI) shares, setting it at $381.00, up from the previous $310.00, while maintaining an Equalweight rating on the stock. The new target appears well-supported by the company’s strong performance, with the stock delivering a 54.3% return over the past year and trading at a reasonable P/E ratio of 12.27. According to InvestingPro analysis, CMI is currently trading near its Fair Value.

Seiden’s commentary highlighted the company’s navigation through various challenges, including cyclical and regulatory issues, supply chain disruptions due to the pandemic, and Environmental Protection Agency (EPA) penalties. He noted that Cummins has largely overcome these hurdles or has them under control, with the firm’s experience allowing it to manage through the cyclical nature of its industry. InvestingPro data supports this resilience, showing a "Good" overall financial health score and highlighting CMI’s position as a prominent player in the Machinery industry.

The analyst also pointed out the significance of Cummins’ restructuring of Accelera, which marks the end of a strategic period for the company. Cummins has cautiously engaged with the energy transition, a move that Seiden believes aligns with the long-term interests of both the company and its customers.

Looking ahead, Seiden sees Cummins entering a favorable phase, with the company likely to benefit from additional market share in the medium-duty (MD) segment and an upcoming emissions-driven cycle. He suggests that Cummins is well-positioned to capitalize on these opportunities without needing to invest heavily in preparation for the 2030s.

While acknowledging potential risks such as tariffs and persistent inflation, Seiden concludes that Cummins presents a simpler investment case now than it did four months or a year ago, based solely on its on-highway business merits.

In other recent news, Cummins Inc. has been in the spotlight following an adjustment in the stock price target by CFRA analyst Stewart Glickman, who raised it to $385 from $345, while maintaining a Hold rating on the company’s shares. This adjustment was based on a valuation of 14.6 times the firm’s initiated 2026 earnings per share (EPS) outlook of $26.40, despite a lowered 2025 EPS estimate for Cummins.

In the recent quarter, Cummins reported its operating EPS at $4.54, slightly below consensus, and a 1% year-over-year decline in Q4 revenues. This was attributed to weaker performance in the Engine and Components segments, counterbalanced by robust performances in the Distribution and Power Systems segments.

Cummins also reported mixed fourth quarter results, surpassing revenue expectations but falling short on earnings due to charges related to restructuring its Accelera segment. The company posted fourth quarter revenue of $8.45 billion, exceeding analyst estimates, but adjusted earnings per share came in at $3.02, below the expected $4.71.

For the full year 2024, Cummins reported record revenue of $34.1 billion, with net income rising to $3.9 billion from $735 million in 2023. Looking ahead, Cummins projects a relatively flat growth environment for 2025, with revenue expectations ranging from a 2% decline to a 3% increase.

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