Cummins stock price target raised to $400 from $350 at CFRA

Investing.com - CFRA has raised its price target on Cummins (NYSE:CMI) to $400 from $350 while maintaining a Hold rating on the stock, citing strength in the company’s power generation business. The stock, currently trading near its 52-week high at $398.09, has delivered an impressive 36% return over the past year, according to InvestingPro data.

The research firm points to secular growth opportunities within power generation markets that are benefiting Cummins’ Power Systems and Distribution segments, justifying a higher valuation multiple of 17x its 2026 earnings estimate. With a current P/E ratio of 18.58 and strong financial health metrics, InvestingPro analysis shows the company maintains a moderate debt level and liquid assets exceeding short-term obligations.

Data center-led demand has contributed to stronger earnings power for Cummins, with the company currently holding approximately 20% market share in the data center backup power market and making capacity investments expected to yield results over the next year.

CFRA has increased its 2026 EPS estimate to $23.55 from $23.01 and raised its 2025 EPS outlook to $22.27 from $21.31, reflecting the improved performance in power generation despite challenges in other segments.

The firm notes that lower on-highway demand is weighing on Cummins’ Engine and Components sales, with truck build rates trending lower and customers showing caution amid tariff uncertainty, which has led the company to withdraw its guidance for 2025.

In other recent news, Cummins Inc . reported a robust second quarter for 2025, exceeding analysts’ expectations with an earnings per share of $6.43, while revenue reached $8.6 billion. These figures surpassed the forecasted earnings per share of $5.26 and expected revenue of $8.47 billion. Despite this strong performance, Cummins has not reinstated its full-year guidance due to uncertainties in macroeconomic conditions, freight, and tariffs. Following the earnings report, Bernstein SocGen Group raised its price target for Cummins to $385, maintaining a Market Perform rating. Meanwhile, Wolfe Research upgraded Cummins from Peerperform to Outperform, citing the company’s higher margins and earnings potential, despite challenges in the Class 8 truck market. Conversely, Freedom Broker downgraded Cummins from Buy to Hold, even though it raised the price target to $399.00, acknowledging the company’s ability to offset declines through a diversified business portfolio. These developments highlight the mixed analyst sentiment surrounding Cummins amidst its recent financial achievements.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.