CMI Should I Buy
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Cummins Inc. is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown strong financial performance and positive long-term growth prospects, the lack of immediate trading signals, insider selling, and mixed analyst sentiment suggest a cautious approach. Holding the stock or waiting for a better entry point would be more prudent.
The technical indicators are mixed. The MACD is negatively expanding, indicating bearish momentum. RSI is neutral at 51.644, showing no clear signal. However, moving averages are bullish (SMA_5 > SMA_20 > SMA_200), and the stock is trading above key support levels (Pivot: 577.72). Resistance levels are at 612.321 and 633.698, which could act as barriers to upward movement.
Strong Q4 financial performance with revenue up 1.05% YoY, net income up 41.87% YoY, and EPS up 41.39% YoY.
Analysts like Argus and Truist maintain a Buy rating with price targets of $696 and $703, respectively, citing long-term growth potential in emerging markets and infrastructure development.
Insider selling has increased significantly by 150.97% in the last month, and a director recently sold shares worth $10.61 million.
Mixed analyst sentiment, with some firms like Baird and UBS maintaining Neutral ratings and lowering price targets.
Investigations into potential fiduciary breaches by executives could create uncertainty.
In Q4 2025, Cummins reported strong financial results. Revenue increased by 1.05% YoY to $8.54 billion, net income rose by 41.87% YoY to $593 million, and EPS increased by 41.39% YoY to $4.27. However, gross margin dropped by 2.92% YoY to 24.3%, indicating some cost pressures.
Analyst sentiment is mixed. While firms like Argus, Truist, and Morgan Stanley have raised price targets and maintain Buy/Overweight ratings, others like Baird and UBS are more cautious with Neutral ratings. Wolfe Research downgraded the stock to Peer Perform, citing valuation concerns despite strong EPS growth projections.
