Cummins (CMI) Stock Forecast & Price Target

Cummins is projecting sales growth of 3-8% for FY2026, suggesting revenues between $34.680 billion and $36.364 billion, bolstered by strong performance in global power generation markets and increased demand for power systems. Sales in the Power Systems segment rose 18% year-over-year, indicating robust demand driven by data center applications, while Distribution sales also increased by 7.5%, primarily due to power generation product demand in North America. Additionally, adjusted EPS grew by 12.5% year-over-year, surpassing consensus estimates, reflecting the company’s operational strength and positive financial trajectory.

Cummins experienced a notable decline in gross margins, which decreased by 120 basis points year-over-year to 22.9%, primarily due to reduced North American truck volumes and increased product coverage costs. Additionally, adjusted EBITDA fell to negative $156 million, reflecting ongoing investment costs and highlighting the challenges within its Power Systems segment, where revenues missed expectations largely due to lower aftermarket sales. The company's outlook for fiscal year 2026 anticipates a 1% revenue decrease in China, driven by weakened heavy-duty and medium-duty truck demand amid geopolitical uncertainties, further compounding the company's financial pressures.