As of December 11, 2025
Key Points
- Cummins Inc. (NYSE: CMI) is trading just below fresh record highs around $525 per share, after setting a new 52‑week high near $526.50 this week. [1]
- Over the last year, the stock has gained roughly 40%, with about 54% of that move coming in just the last six months, significantly outpacing the broader market and industrial peers. [2]
- Q3 2025 results showed $8.3 billion in revenue and GAAP EPS of $3.86, weighed down by a $240 million non‑cash charge in the Accelera hydrogen business; on an adjusted basis, EPS around $5.6 beat Wall Street estimates. [3]
- Cummins has launched a strategic review of its electrolyzer arm after that charge and an industry‑wide slump in green hydrogen projects, even as it continues to win large hydrogen and fuel‑cell orders. [4]
- Wall Street’s overall stance is “Moderate/Buy”, with average 12‑month price targets clustered around $480–$530 and a high target near $600–$628, implying limited upside at today’s price but meaningful potential in bullish scenarios. [5]
Cummins stock today: price, performance and valuation
Cummins shares are trading around $524–$525 in Thursday’s session, giving the company a market value in the low‑to‑mid $70 billion range. [6]
On December 10, the stock closed at $524.53, up 4.9% on the day and setting a new 52‑week high, with intraday trade reaching roughly $526.50. [7] That move extended a remarkable rally: according to InvestingPro data, Cummins is up about 39% over the past 12 months and 54% over the last six months. [8]
Performance has far outpaced both the S&P 500 and the industrials sector. A mid‑November analysis from Barchart pegged Cummins’ 12‑month gain near 26% and year‑to‑date return at 30.8%, versus roughly 13–14% for the S&P 500 and the Industrial Select Sector SPDR (XLI) at that time. [9] With the stock continuing higher since then, those relative gains have only widened.
From a valuation standpoint:
- MarketBeat’s latest snapshot shows a trailing P/E ratio around 27 and a PEG (price/earnings-to-growth) ratio near 2, alongside a beta just over 1. [10]
- InvestingPro similarly flags the stock as trading at about 26–27x trailing earnings, slightly above its own estimate of fair value. [11]
Using current Street EPS forecasts (roughly $22–23 per share for 2025), Cummins is trading at about 23x forward earnings, a healthy premium to many traditional industrial peers but arguably in line with its repositioning as both a critical data center power supplier and a decarbonization play. [12]
Q3 2025: solid operations, messy headline number
Cummins reported third‑quarter 2025 results on November 6:
- Revenue: $8.3 billion, down about 2% year on year but ahead of consensus expectations.
- GAAP net income: $536 million (6.4% of sales).
- GAAP EPS: $3.86.
- EBITDA margin: 14.3% of sales. [13]
The headline EPS looks soft, but it’s heavily distorted by a $240 million non‑cash impairment and inventory write‑down in the Accelera zero‑emissions segment, tied primarily to the electrolyzer business. [14]
On an adjusted basis, several outlets including Reuters and Zacks report that Cummins delivered EPS of roughly $5.59, beating consensus estimates around $4.8–$4.9, with a mid‑teens percentage earnings surprise and revenue roughly 3% above expectations. [15]
Operationally, the quarter showed a familiar split:
- Engine and Components segments saw double‑digit declines in sales as the North American heavy‑duty truck cycle cooled. [16]
- Power Systems and Distribution remained strong, with power generation products — especially those serving data centers and mission‑critical loads — delivering record profitability and offsetting part of the truck‑market weakness. [17]
Management has flagged an expected 15% decline in North American on‑highway engine shipments in Q4, underscoring that the truck side of the business is still firmly in a down‑cycle even as power generation booms. [18]
Hydrogen and Accelera: from flagship growth story to strategic review
For several years Cummins has promoted Accelera by Cummins — its zero‑emissions arm — as a central pillar of its Destination Zero strategy. The group includes electrolyzers, fuel cells and hydrogen powertrains, as well as battery and hybrid systems.
2025 brought both headline wins and hard reality:
- Accelera delivered its largest electrolyzer system to date, a 35 MW PEM electrolyzer for Linde’s green hydrogen facility in Niagara Falls, New York. [19]
- It also agreed to supply a 5 MW electrolyzer to Tyczka Hydrogen GmbH in Germany and celebrated the completion of a major hydrogen internal‑combustion engine project for commercial vehicles in the UK. [20]
Yet Q2 and Q3 numbers reveal how challenging the economics remain:
- In Q2 2025, Accelera delivered about $105 million in sales but posted a $100 million EBITDA loss as the company “paced” its zero‑emission investments. [21]
- In Q3 2025, the segment absorbed the $240 million non‑cash charge and reported a segment EBITDA loss of roughly $336 million, reflecting weaker demand and write‑downs in the electrolyzer line. [22]
On November 7, Cummins confirmed it has launched a strategic review of the electrolyzer business. Reporting from Hydrogen Fuel News notes that management is weighing options that range from scaling down and focusing on smaller, modular systems, to joint ventures, potential divestiture, or refocusing capital on higher‑margin diesel and natural gas engines if market conditions don’t improve. [23]
The review takes place against a deteriorating policy backdrop in the United States. An analysis in Indiana Economic Digest highlights how the rollback of federal climate initiatives and hydrogen hub incentives has chilled the broader clean‑hydrogen build‑out, with projects paused or canceled and Cummins officials warning about the risk of ceding the electrolyzer market to heavily subsidized Chinese competitors. [24]
In short: hydrogen remains a strategic long‑term bet, but the near‑term profit drag is real, and the company is signaling that its approach — and perhaps its level of commitment — may change in 2026.
Data centers and power systems: the “quiet” AI trade
While the hydrogen story has become more complicated, one growth engine has been surprisingly straightforward: powering AI and cloud data centers.
- In Q2 2025, Cummins’ Power Systems sales rose 19% year on year to $1.9 billion, with segment EBITDA margins climbing to nearly 23%, helped by robust demand from data centers and other mission‑critical applications. [25]
- Reuters and other outlets have repeatedly linked Cummins’ recent earnings beats to strong demand for generator sets and backup power as hyperscale data centers race to keep up with AI‑driven electricity needs. [26]
Barron’s bluntly framed it earlier this year: “Diesel Engine Maker Cummins Is an AI Stock. Yes, an AI Stock.” The logic is simple — more AI means more data centers, which means more demand for reliable backup power, a field where Cummins has deep technology and global distribution advantages. [27]
Recent research notes and thematic pieces from Bank of America and Investing.com have likewise highlighted Cummins as a “low‑cost way to get exposure to U.S. data‑center build‑out”, putting it in the same conversation as power infrastructure and grid‑equipment suppliers rather than only traditional truck‑engine peers. [28]
This dual identity — cyclical diesel and truck supplier and structural AI‑infrastructure play — is at the heart of the current debate about valuation.
What Wall Street is saying: ratings, price targets and EPS forecasts
Across major data providers, the message is consistent: analysts like Cummins, but many think the stock has already priced in a lot of good news.
Ratings and price targets
Different services tally slightly different sets of analysts, but the picture is broadly similar:
- MarketBeat: “Moderate Buy” based on 11 Buy and 7 Hold ratings; average price target about $479.5, with a range from $350 to $628. [29]
- Barchart / WRAL: among 20 analysts, consensus is also “Moderate Buy” (8 Strong Buys, 11 Holds, 1 Strong Sell) with a mean target around $491.9 and a Street‑high target of $600. [30]
- MarketWatch / FactSet: an average target near $529 with 23 ratings and an overall “Overweight” recommendation. [31]
Recent target moves have skewed upwards:
- Citigroup raised its target from $530 to $580 and reiterated a Buy rating.
- Wells Fargo initiated coverage at Overweight with a $599 target.
- UBS upgraded Cummins from Sell to Neutral, lifting its target to $500.
- Truist, Wolfe Research, Jefferies and Bernstein have all nudged targets higher into the $475–$545 range following Q3 results and growing conviction in the power‑generation story. [32]
At today’s price near $525, Cummins now trades around or above the average target on several of these lists, but still below the most optimistic estimates.
EPS and growth expectations
On the earnings front:
- Barchart’s November overview cited FY 2025 EPS of $22.44, up about 5% year on year. [33]
- Zacks’ company report lists a current‑year EPS consensus around $23.1 and an estimated long‑term EPS growth rate of roughly 11%. [34]
- Prior analysis from Yahoo Finance ahead of Q3 suggested 2026 EPS could climb into the mid‑$24 range, representing low‑to‑mid‑teens growth versus 2025. [35]
Notably, Cummins withdrew its formal 2025 revenue and margin guidance in May because of tariff‑related uncertainty and a weakening North American truck market, after earlier forecasting revenue between –2% and +3% and EBITDA margins in the 16.2–17.2% range. [36]
Even without official company guidance, the Street consensus implies that:
- Core earnings remain solidly profitable despite truck headwinds and hydrogen losses.
- Analysts expect mid‑single‑digit EPS growth in 2025, accelerating into double‑digit growth beyond 2026 if data center demand and margin expansion in Power Systems persist. [37]
Valuation debate: value stock, growth story — or “great company, wrong price”?
There is no shortage of opinions about whether Cummins stock is expensive or attractive at current levels.
- Zacks continues to frame Cummins as a “top value stock for the long term”, pointing to strong cash flows, a reasonable earnings multiple versus its historical range, and supportive estimate revisions following recent earnings beats. [38]
- A recent deep‑dive from Simply Wall St argues that at around $510, Cummins screens as overvalued versus a fair‑value estimate near $510 on one fundamental framework, but undervalued versus a DCF‑based fair value around $638 per share, highlighting how differing assumptions about truck cycles and hydrogen payoffs can meaningfully alter the conclusion. [39]
- A skeptical note on Seeking Alpha titled “Cummins: Great Company, Wrong Price” contends that as Venezuelan tariff costs and truck weakness roll through the P&L, the stock should trade closer to 12x 2026 EV/EBITDA, implying downside from current levels. [40]
Overlaying these perspectives on the raw numbers:
Supporters argue that such multiples are justified for a business with:
- Structural exposure to AI data center power demand.
- A long runway in aftermarket service and parts.
- Optionality in zero‑emissions technologies if the hydrogen and fuel‑cell market eventually re‑accelerates. [43]
Skeptics counter that:
- The company is still fundamentally tied to cyclical truck and off‑highway markets.
- The hydrogen bet is burning cash and now under strategic review.
- U.S. tariffs and policy shifts have injected new macro risk that justifies a lower multiple. [44]
Dividend, balance sheet and ownership
For income‑oriented investors, Cummins offers a reliable, if modest, dividend stream:
- The quarterly dividend was raised in 2025 from $1.82 to $2.00 per share, marking the 16th consecutive annual increase. [45]
- At today’s share price, the annualized $8.00 dividend translates into a yield of about 1.5%. [46]
Importantly, that payout is covered by earnings with room to spare. On consensus 2025 EPS around $22–23, the dividend payout ratio sits in the 35–36% range, leaving capacity for reinvestment and further hikes.
The balance sheet looks relatively sturdy for a capital‑intensive manufacturer:
- MarketBeat cites a debt‑to‑equity ratio around 0.5, with quick and current ratios near 1.1 and 1.8, respectively. [47]
Ownership and capital flows also show ongoing institutional interest:
- A new SEC filing shows Nebula Research & Development LLC purchased about 9,198 shares (~$3.0 million), while MarketBeat estimates that institutional investors collectively hold roughly 83% of shares outstanding. [48]
- AXA S.A. recently trimmed its position by 4.5%, selling 11,717 shares but still holding nearly 0.18% of the company. [49]
- Other institutions such as Natixis have added to positions in recent months, according to filings summarized on Google Finance and Investing.com. [50]
QuiverQuant, which tracks social and alternative data, notes that online discussion around Cummins has been particularly focused on its dividend increase and strategic pivot toward data‑center power and hydrogen — a sign that the stock is firmly on the radar of both retail and institutional investors. [51]
Risks to watch: trucks, tariffs, hydrogen policy and labor
Despite the strong share price, Cummins faces several meaningful risks that could reshape its outlook into 2026:
- Truck cycle and industrial demand
Q3 results underscore how vulnerable the Engine and Components segments are to downturns in North American truck production, which management expects to remain weak into at least early 2026. [52] - Trade and tariff uncertainty
The company explicitly cited broad U.S. import tariffs and macro uncertainty when it withdrew its 2025 financial forecast in May, joining other manufacturers in stepping back from formal guidance. Continued shifts in trade policy could squeeze margins or disrupt global supply chains. [53] - Hydrogen economics and policy risk
The $240 million electrolyzer impairment, the strategic review of Accelera and the rollback of hydrogen subsidies and tax credits in the U.S. all highlight that Cummins’ zero‑emissions ambitions may take longer — and cost more — than the market once assumed. [54] - Labor relations
Around 240 workers at the Cummins‑Jacobs Vehicle Systems plant in Bloomfield, Connecticut, went on strike in recent months over wages, job security and benefits, following earlier industrial action at other Cummins sites. Extended disputes could push up labor costs or disrupt production, though so far the financial impact appears contained. [55] - Execution risk in AI and power systems
The AI‑data‑center narrative assumes that Cummins can continue to scale large‑engine capacity, maintain technological leadership and fend off competitors in power generation. Any misstep — from reliability issues to aggressive new entrants — could compress the high margins investors are currently rewarding. [56]
Bottom line: Cummins at a crossroads
As of December 11, 2025, Cummins stock sits at an intriguing junction:
- The market is rewarding its role as a critical enabler of AI and cloud infrastructure, as well as its long record of execution, dividend growth and balance‑sheet discipline. [57]
- At the same time, investors must weigh classic cyclical headwinds in trucks, policy‑driven volatility in hydrogen and trade, and a share price that already reflects premium expectations versus much of the industrial sector. [58]
For long‑term followers of Cummins, the core question is less “diesel vs hydrogen” and more how the company balances reliable cash‑generating businesses with high‑risk, high‑reward transition technologies — and whether today’s valuation offers enough margin of safety for whichever path it ultimately leans into.
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References
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