Goldman Sachs Upgrades Cummins (CMI) Stock to Buy, Raises PT

On May 27, analysts at Goldman Sachs upped Cummins Inc. (NYSE:CMI)’s stock from “Neutral” to “Buy,” raising its price objective to $431 from the prior target of $410. This upgrade stems from the expectations of structurally higher profitability in the company’s Power Systems business, thanks to the new pricing structure extending beyond data centers.

Goldman Sachs Upgrades Cummins (CMI) Stock, Raises PT to $431

A mechanic standing proudly in a factory floor surrounded by the engines the company produces.

The upgrade also comes after the favorable outlook related to the Environmental Protection Agency (EPA)’s regulations for 2027. Additionally, the firm highlighted the observation that US truck demand expectations are now significantly lowered.

Cummins Inc. (NYSE:CMI) reported sales of $1.6 billion from its Power Systems segment. The revenues in North America went up by 15%, while international sales rose 22%, primarily because of higher power generation demand, mainly for the data center market. In its Power Systems business, Cummins Inc. (NYSE:CMI) witnessed strong performance in both EBITDA dollars and percentage in Q1 2025 as it continues to benefit from operational improvements and strong end markets.

The company plans to invest over $1 billion in its engine and power systems manufacturing operations in the US over the next few years. The new price target demonstrates Goldman Sachs’ confidence in the company’s ability to tackle the current market conditions.

As the company evaluates the current manufacturing footprint and the exposure to tariff regulations, Cummins Inc. (NYSE:CMI) believes that it remains well-placed because it mainly produces engines and gensets in the markets where it sells them.

Cummins Inc. (NYSE:CMI) is the leading manufacturer of diesel engines used in commercial trucks, off-highway equipment, and railroad locomotives, apart from standby and prime power generators.

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