Cummins (CMI) PT Raised to $600 at Bernstein SocGen Group

Bernstein SocGen Group analyst Chad Dillard raised the price target on Cummins (NYSE: CMI) to $600.00 (from $544.00) while maintaining a Market Perform rating.

The analyst commented: "CMI reported 4Q adj. EPS of $5.81, 14% above street ($1.54 from Accelera charges). EBITDA of $1.4B came in 2% ahead. With the stock entering today up 16% YTD (vs. S&P up 2%), the guide came in below street driven by margin expectations. As a result, the stock finished down 11%, an outsized move for a modest guide down that could be viewed through the lens of conservatism.

Investors had their eyes set on a bullish guide though tariffs took the steam out. Net sales of +5.5% and 17.5% EBITDA margins imply $35.5B of sales (in-line) and $6.2B in EBITDA (1% below). At a segment level, top line guides were in-line, while EBITDA came in below for Engine, Distribution and Components where incrementals imply LSDs (and high-20s in Power vs. 45-50% in the last 2 years). Tariffs are a 50bp drag to ‘26 EBITDA margins (~$180M impact) implying a 10ppt drag to full-year incrementals. The greatest impact is felt in Distribution where, along with tariffs, margins are being held back by negative mix and greater SG&A investments that are outpacing guided revenue growth."

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