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With a market value of $52.1 billion, Cummins Inc. (CMI) is a global leader in engines and power systems, serving industries like trucking, construction, and agriculture. Based in Columbus, Indiana, it generates substantial international revenue and offers filtration, turbochargers, and emission solutions. The company is advancing hydrogen and battery-electric technologies to support its shift toward cleaner energy.
Cummins stock is in overdrive, blowing past the broader market and its industrial peers. The stock has surged 44.9% over the past year, easily outpacing the S&P 500 Index’s ($SPX) 22.8% climb. The rally continues in 2025, with CMI up 10.8% year-to-date, outshining the SPX’s 4.5% gain.
Even against its own sector, CMI flexes its dominance, outpacing the Industrial Select Sector SPDR Fund (XLI), which has risen 17.6% over the past year and 5.3% on a YTD basis.
Despite headwinds in the heavy-duty truck sector, Cummins’ strategic initiatives and diversified operations have set the stage for continued strength in the market. Reinforcing this momentum, Cummins shares popped 4.4% on Feb. 4 after announcing its fiscal 2024 and fourth-quarter earnings. Its Q4 revenue reached $8.45 billion, down slightly from $8.54 billion last year but beating estimates by 4.7%. Adjusted EPS of $5.16 beat expectations, though net income fell to $418 million. The engine and components segments saw declines, while distribution and power systems posted double-digit growth, driven by strong power generation demand.
For fiscal 2025, Cummins expects revenue to range from a 2% decline to a 3% increase, with EBITDA margins between 16.2% and 17.2%.
For the current fiscal year, ending in December, analysts expect CMI’s EPS to grow 5.6% to $22.57 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 18 analysts covering CMI stock, the consensus is a “Moderate Buy.” That’s based on six “Strong Buy” ratings and 12 “Holds.”
The configuration is slightly more bullish than a month ago when five analysts appointed the stock a “Strong Buy.”
Evercore ISI’s David Raso reaffirmed a “Buy” rating on Cummins on Feb. 19, setting a $451 price target.
The mean price target of $404.57 represents a 4.8% premium to CMI’s current price levels. The Street-high price target of $435 suggests an upside potential of 12.7%.
