Is Cummins (CMI) Quietly Recasting Its Diesel Legacy Into a Dual-Engine Energy Transition Story?

• Cummins has been expanding beyond its traditional diesel engines into batteries, hydrogen fuel cells and other low-emission technologies, while still relying on its legacy power systems to generate steady revenue and support its dividend profile.
• This shift is drawing increased attention from long-term investors who see the combination of established cash flows and emerging clean-energy businesses as an appealing way to gain exposure to the energy transition.
• We’ll now explore how Cummins’ push into batteries and hydrogen reshapes its investment narrative and what it could mean for investors.

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Cummins Investment Narrative Recap

For Cummins to make sense in a portfolio, you need to believe its profitable diesel and power systems can fund a disciplined buildout in batteries and hydrogen without eroding returns. The recent clean energy focus does not materially change the key near term catalyst, which remains execution in Power Systems and data center demand, or the biggest risk, that alternative powertrain investments in Accelera keep generating losses without clear traction.

Against this backdrop, the company’s 2025 guidance, calling for flat to slightly higher revenue with improved profitability and cash flow despite softer North American truck markets, ties directly into that catalyst by highlighting how Power Systems and diversification are expected to support earnings while Cummins continues to invest in low emission technologies.

Yet behind the promise of cleaner technologies, there is a risk investors should be aware of if Accelera keeps...

Read the full narrative on Cummins (it's free!)

Cummins' narrative projects $40.6 billion revenue and $4.3 billion earnings by 2028. This requires 6.4% yearly revenue growth and a $1.4 billion earnings increase from $2.9 billion today.

Uncover how Cummins' forecasts yield a $531.63 fair value, a 3% downside to its current price.

Exploring Other Perspectives

Five Simply Wall St Community valuations span about US$280 to roughly US$634 per share, showing how far apart individual views on Cummins can be. When you weigh these against Cummins’ reliance on data center driven power systems to offset truck market softness, it becomes clear why exploring several independent perspectives on its future earning power can be useful.

Explore 5 other fair value estimates on Cummins - why the stock might be worth 49% less than the current price!

Build Your Own Cummins Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Cummins research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free Cummins research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Cummins' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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