Cummins Leverages Power Generation Demand to Offset Truck Production Decline
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 22 2025
0mins
Source: Yahoo Finance
- Market Demand Support: Cummins anticipates that demand from power generation markets will help offset the expected downturn in North American heavy truck production in 2026, particularly as its Power Systems business benefits from rising needs tied to data centers, enhancing the company's resilience during industry downturns.
- Rating Upgrade: Barclays upgraded Cummins to Overweight and raised its price target to $546 based on a 20x earnings multiple for 2026, indicating that despite recent strong stock gains, the company remains attractively valued relative to peers.
- Earnings Diversification: Analysts expect that by 2025, Cummins' Power Systems and Distribution segments will account for approximately 60% of EBITDA, which not only enhances the stability of earnings but also provides additional growth potential as the truck market recovers.
- Risk Factors: Despite the optimistic outlook, attention must be paid to prolonged weakness in truck production and volatility in power generation demand, which could impact the company's overall performance and profitability.
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Analyst Views on CMI
Wall Street analysts forecast CMI stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for CMI is 538.00 USD with a low forecast of 385.00 USD and a high forecast of 653.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
7 Buy
6 Hold
0 Sell
Moderate Buy
Current: 577.860
Low
385.00
Averages
538.00
High
653.00
Current: 577.860
Low
385.00
Averages
538.00
High
653.00
About CMI
Cummins Inc. is a global power solutions company. The Company’s segments are Components, Engine, Distribution, Power Systems, and Accelera. Components segment designs, manufactures, and supplies products which include axles, drivelines, brakes, and suspension systems. Engine segment manufactures and markets a range of diesel and natural gas-powered engines under the Cummins brand name, for on and off-highway markets. Distribution segment includes sale and support of a range of products and services, including power generation systems, high-horsepower engines, heavy and medium duty engines, and others. Power Systems segment is a power provider, which designs, manufactures and sells engines for industrial applications, prime power generator sets, alternators, and others. Accelera segment designs, manufactures, sells, and supports electrified power systems with components and subsystems, including battery, fuel cell and electric powertrain and hydrogen production technologies.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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