Cummins Reports Q4 Earnings Beat Expectations Despite EPS Miss
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3d ago
0mins
Should l Buy CMI?
Source: seekingalpha
Cummins Inc. shares fell 9.25% as the stock hit a 5-day low amid broader market declines, with the Nasdaq-100 down 1.28% and the S&P 500 down 1.00%.
The company's Q4 earnings report revealed a GAAP EPS of $4.27, which missed estimates by $0.75, but revenue of $8.5 billion exceeded expectations by $400 million, showcasing resilience despite challenges. Additionally, the results included $218 million in charges related to the Electrolyzer business within Accelera, impacting EPS significantly. Analysts have suggested that the stock may face short-term pressure due to a downgrade in the power systems business, which could affect investor confidence.
Despite the earnings miss, Cummins maintains a positive outlook for 2026, projecting revenue growth of 3% to 8%. However, the mixed performance and ongoing challenges in the traditional power systems market may lead to volatility in the stock price.
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Analyst Views on CMI
Wall Street analysts forecast CMI stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for CMI is 538.00 USD with a low forecast of 385.00 USD and a high forecast of 653.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
7 Buy
6 Hold
0 Sell
Moderate Buy
Current: 540.650
Low
385.00
Averages
538.00
High
653.00
Current: 540.650
Low
385.00
Averages
538.00
High
653.00
About CMI
Cummins Inc. is a global power solutions company. The Company’s segments are Components, Engine, Distribution, Power Systems, and Accelera. Components segment designs, manufactures, and supplies products which include axles, drivelines, brakes, and suspension systems. Engine segment manufactures and markets a range of diesel and natural gas-powered engines under the Cummins brand name, for on and off-highway markets. Distribution segment includes sale and support of a range of products and services, including power generation systems, high-horsepower engines, heavy and medium duty engines, and others. Power Systems segment is a power provider, which designs, manufactures and sells engines for industrial applications, prime power generator sets, alternators, and others. Accelera segment designs, manufactures, sells, and supports electrified power systems with components and subsystems, including battery, fuel cell and electric powertrain and hydrogen production technologies.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Weak Labor Market Signals: Challenger's report revealed a staggering 117.8% year-over-year increase in job cuts for January, totaling 108,435, the highest for January since 2009, while initial jobless claims rose by 22,000 to 231,000, highlighting vulnerabilities in the US labor market that could hinder economic recovery.
- Bitcoin Plunge: Bitcoin (^BTCUSD) plummeted over 12% to a 1.25-year low, reflecting deepening negative momentum in the cryptocurrency market, with approximately $2 billion flowing out of Bitcoin ETFs in the past month, signaling a decline in investor confidence.
- Earnings Season Impact: Despite 150 S&P 500 companies set to report earnings this week, market focus on economic data intensifies, with S&P 500 earnings expected to grow by 8.4% in Q4, yet overall market sentiment remains suppressed by recent economic weakness.
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- Weak Labor Market Signals: Challenger's report shows January job cuts surged 117.8% year-on-year to 108,435, marking the highest level since 2009, indicating fragility in the US labor market and increasing investor concerns about economic outlook.
- Bitcoin Price Crash: Bitcoin (^BTCUSD) is down more than 7% today, hitting a 1.25-year low and falling about 45% from its October record high, reflecting negative sentiment in the cryptocurrency market and a trend of capital outflows.
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- Strong Financial Performance: Cummins reported Q4 2025 revenues of $8.5 billion, a 1% increase year-over-year, with EBITDA of $1.2 billion or 13.5% of sales, and $1.4 billion or 16% excluding one-time charges, showcasing resilience despite weak North American truck demand.
- Strategic Investments and Acquisitions: The company acquired First Mode and partnered with Komatsu to accelerate hybrid solutions in mining, while launching the S17 Centum generator set to address urban power needs, indicating a strategic focus on sustainable energy solutions.
- Optimistic Outlook: Projected total company revenues for 2026 are expected to grow by 3% to 8%, with heavy-duty truck demand anticipated to improve in the second half of the year, as production is forecasted between 220,000 and 240,000 units, reflecting potential market recovery.
- Electrolyzer Business Review: Cummins is reviewing its Accelera electrolyzer business to streamline operations and focus investments, with expected net losses projected to decline to between $325 million and $355 million, demonstrating the company's adaptability to shifts in hydrogen market demand.
See More
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- McKesson Earnings Beat: McKesson's fiscal third-quarter earnings per share exceeded Wall Street's highest estimates, and the adjusted full-year EPS guidance was raised above analyst consensus, leading to a 16% stock price increase, indicating strong performance in the medical supply sector.
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