| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 274.99 | -19 |
| Intrinsic value (DCF) | 19.26 | -94 |
| Graham-Dodd Method | 94.76 | -72 |
| Graham Formula | 237.61 | -30 |
Cummins Inc. (NYSE: CMI) is a global leader in power solutions, specializing in diesel and natural gas engines, hybrid and electric powertrains, and related components. Headquartered in Columbus, Indiana, Cummins operates across five key segments: Engine, Distribution, Components, Power Systems, and New Power. The company serves diverse markets, including heavy-duty trucks, construction, mining, marine, rail, and defense, offering innovative products under the Cummins brand and through OEM partnerships. With a strong focus on sustainability, Cummins is expanding its electrified power systems, including battery and hydrogen fuel cell technologies, positioning itself at the forefront of the energy transition. The company’s vertically integrated model—spanning manufacturing, distribution, and aftermarket services—ensures resilience and customer loyalty. Cummins’ commitment to R&D and emissions compliance reinforces its leadership in the industrial machinery sector, making it a critical player in global infrastructure and transportation.
Cummins presents a compelling investment case due to its diversified revenue streams, strong aftermarket services, and leadership in powertrain innovation. The company’s transition toward electrification and hydrogen technologies aligns with global decarbonization trends, offering long-term growth potential. However, cyclical exposure to heavy-duty trucking and industrial markets poses earnings volatility risks. A solid balance sheet, consistent dividend payouts (current yield ~2.5%), and a beta near 1.0 suggest moderate risk relative to the market. Investors should monitor supply chain headwinds and regulatory shifts in emissions standards, which could impact margins.
Cummins holds a dominant position in the engine and power systems market, leveraging its century-long expertise in diesel technology and a robust global distribution network. Its competitive edge stems from vertical integration—controlling everything from component manufacturing to aftermarket services—which enhances margins and customer retention. The company’s early investments in electrification (e.g., Accelera brand) and hydrogen solutions differentiate it from legacy peers, though it faces stiff competition from pure-play EV powertrain firms. In emissions-critical markets, Cummins’ advanced aftertreatment systems (like X15 Efficiency Series) outperform smaller rivals. However, reliance on cyclical industries (e.g., trucking) and slower adoption of alternative fuels in emerging markets remain challenges. Strategic partnerships (e.g., Daimler Truck, Isuzu) and acquisitions (e.g., Meritor, Hydrogenics) bolster its technological moat.