COLUMBUS, Indiana, June 8, 2026, 18:03 EDT
- UBS upgraded Cummins to Buy from Neutral and increased its price target to $850, up from $565.
- Cummins ended the session 3.3% higher at $672.68 on the NYSE.
- The call rests on stronger demand for data-center backup power and a steadier North American truck cycle.
UBS sent Cummins shares higher Monday, lifting its rating on the engine company to Buy from Neutral. UBS said demand from data centers and better truck sales could boost results past analysts’ estimates. Cummins finished the session at $672.68, adding 3.3%. UBS’s new price target is $850, up from $565.
Cummins is getting more attention from investors for its backup power business, not just for its core truck engines. Demand from data centers — for generators and equipment needed when the grid can’t keep up — is now a bigger factor for earnings as AI and cloud growth push up power use.
UBS sees double-digit growth in Cummins’ Power unit, saying stronger truck demand and new higher-content engines will push up earnings for the next two years. UBS forecasts EPS climbing from $30 in 2026 to $41.25 in 2028. That’s higher than the consensus estimate of $39.10, according to the note.
The bank said consensus is missing upside in Power Systems and Distribution. Its 2028 EBITDA forecast for those units is 6% higher than consensus. EBITDA—earnings before interest, taxes, depreciation and amortization—is used by investors to compare operating profit before financing and accounting.
Cummins raised its 2026 revenue growth target to 8% to 11% from the prior 3% to 8%, and boosted its EBITDA margin goal to a range of 17.75% to 18.50%. The company’s first-quarter revenue came in at $8.4 billion, up 3%. Power Systems led with a 19% jump to $2.0 billion. UBS now has more detail to work with.
Chief Executive Jennifer Rumsey said after the quarter that data-center power demand “continues to outpace expectations,” and North America on-highway markets are on the mend. That’s good for Cummins: truck sales can rebound from a weak stretch, while generator sales tie Cummins to the growth trade bringing more buyers into old-line industrials. Cummins Inc.
Cummins told investors on May 21 it is lifting its long-term financial goals, rolling out bigger engines, and adding new mining and power generation products. Power Systems president Jenny Bush said, “demand for reliable power is accelerating.” The company said its five business units are engines, components, distribution, Power Systems, and Accelera, its zero-emissions arm. Cummins Inc.
Competition is heating up. Generac pushed its 2026 sales target higher with more data-center orders in its backlog. Caterpillar is seeing gains from AI-driven demand for engines and power gear, too. Paccar, which makes trucks and is a Cummins competitor, posted a drop in first-quarter revenue, but net income climbed.
Caution from GuruFocus on Cummins. Their valuation screens show the stock as overvalued, with the latest GF Value at about $323. Shares now trade north of $670. That’s making the rally look stretched on those models despite rising earnings estimates.
Execution is another risk. Cummins’ filings and statements list tariffs, emissions regulations, supply chain issues, what rivals are doing, and tech changes as things that could make results miss forecasts. There was also a $199 million charge in the first quarter from selling its low-pressure fuel cell business, showing some energy-transition projects have not worked out.
Cummins is getting attention on the power narrative, with MarketScreener showing an Outperform average from 22 analysts and a $725.12 target before UBS bumped up its price target to $850, the highest call so far.
