Cummins (CMI) is positioned for strong earnings growth as power products ramp up and North American truck demand begins to recover, UBS said in a note.
UBS expects earnings per share to compound at a 17% annual rate from 2026 to 2028, supported by power products and a modest truck replacement cycle. It also expects Cummins to return more capital to shareholders as spending on its new engine rollout slows.
Truck orders could bottom in the next one to two months amid uncertainty over emissions policy, then pick up in H1 2027, UBS said.
The firm also sees potential for modest valuation expansion as AI data center investment becomes more predictable.
UBS maintained the company's buy rating and lowered its price target to $675 from $741.
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