GET DAILY SIGNALSCummins (CMI) Drops 13% After Q3 Miss and Trimmed Guidance
Key Takeaways
- Cummins (CMI) shares fell roughly 13% over the past 30 days, sliding from about $529 in mid-October to near $461 by mid-November.
- The decline followed third-quarter 2026 results in which revenue missed Wall Street expectations and the company trimmed its full-year revenue guidance.
- Weaker North American pickup truck demand, pressured by elevated diesel prices and interest rates, was the primary driver of the softer outlook.
- Record quarterly EBITDA of $1.8 billion and strong Power Systems growth tied to data-center demand were offset by top-line and truck-market concerns.
- Analysts tempered targets after the report, with Truist cutting its price target to $637 from $779 while retaining a Buy rating.
- Shares are down roughly 27-28% over the trailing three months, reflecting a broader re-rating from record highs near $650 reached in early August.
Cummins' Business and Market Position
Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, power generation systems, and related components. The company operates across five segments — Engine, Components, Distribution, Power Systems, and the zero-emissions-focused Accelera business — and is a leading supplier to heavy-duty truck, construction, industrial, and power generation markets worldwide.
Investors follow Cummins for its exposure to the global commercial vehicle cycle and, increasingly, for its growing role in the data-center power story. Its Power Systems unit, which sells generators and energy-storage solutions used to back up AI-driven computing infrastructure, has become a key growth engine. Competitive strengths include a global manufacturing and distribution footprint, long-standing OEM relationships, a strong aftermarket business, and a 17-year track record of consecutive dividend increases. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Recent Stock Performance: The Past 30 Days and Quarter
Over the last 30 days, Cummins shares declined approximately 13%, falling from a closing level of about $529 on October 13 to roughly $461 by mid-November. The move was concentrated in early November, when the stock dropped sharply following its third-quarter earnings release and guidance revision.
The quarterly picture is steeper. Over the trailing three months, the stock has fallen roughly 27-28%, down from levels near $650 in early August. That extended decline pushed shares toward their 52-week low of $443.62, set on November 5, and well below the 52-week high of $737.76. The trend reflects a steady de-rating from mid-summer peaks rather than a single-day event. From what I see, this kind of move often prompts a closer look at valuation metrics through tools like Tickeron’s AI Trend Prediction Engine.
What Triggered the Latest Decline
The primary catalyst was Cummins' third-quarter 2026 report, released November 5. Revenue rose 13% year over year to $9.44 billion, but that figure came in below consensus estimates near $9.89 billion. Diluted earnings per share reached $8.25, up from $3.86 a year earlier, while adjusted EPS of $7.71 missed the Zacks Consensus Estimate of $8.38. Record EBITDA of $1.8 billion, or 18.9% of sales, underscored strong underlying margins but did not prevent a negative market reaction.
The selloff was driven mainly by guidance. Cummins lowered its full-year 2026 revenue growth outlook to approximately 10%, down from a prior range of 10% to 13%, citing weaker-than-expected North American pickup truck demand. The company also cut its pickup engine shipment forecast to 118,000-122,000 units from 125,000-140,000, pointing to elevated diesel prices and interest rates. Management noted that roughly $200 million of expected Power Systems revenue was delayed into the fourth quarter due to a supplier issue. In response, Truist reduced its price target to $637 from $779.
Quarterly Trends and Broader Context
The quarterly decline reflects a combination of cyclical and structural forces. Through much of 2026, Cummins traded near record levels as investors rewarded the company's exposure to AI data-center power demand. Power Systems posted record third-quarter revenue of $2.3 billion, up 15%, with a 25.4% EBITDA margin, and management indicated that order intake was extending into the second half of 2028.
That strength, however, has been increasingly weighed against softening demand in the North American pickup truck market and uncertainty around EPA 2027 emissions regulations, which management says is delaying some customer purchasing decisions. A steady drift lower through late summer and autumn, punctuated by the November earnings-related gap down, defined the three-month trend even as the company continued generating strong operating cash flow and returning capital to shareholders.
Key Factors to Monitor Going Forward
Looking ahead, investors are likely to focus on whether Cummins can recover the roughly $200 million in revenue delayed into the fourth quarter and whether data-center and power generation demand sustains its momentum into 2027. Fourth-quarter revenue growth is guided to approximately 15%, and management expects another year of strong operating cash flow.
Key risks include the trajectory of North American pickup truck and heavy-duty truck production, diesel prices and interest rates, the final EPA emissions rule expected in December, and the phased launch of Cummins' X10 and X15 engine platforms in 2027. The pace of capacity expansion in Power Systems and continued losses in the Accelera segment will also be closely watched. As always, these factors should be evaluated in the context of individual investment objectives rather than as a basis for specific predictions. I’m watching this closely as the earnings season unfolds.
AI Trading Tools for Market Context
In my own analysis, I sometimes review Tickeron’s Trending AI Robots to see how automated strategies have performed on names like this one. The page highlights a selection of bots with varying approaches and timeframes, which can provide an additional layer of data-driven perspective when evaluating recent moves or potential setups. It serves as a useful complement to traditional research for those looking to incorporate systematic signals.
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CMI's Stochastic Oscillator sits in oversold zone for 9 days
The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an uptrend is expected.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where CMI's RSI Oscillator exited the oversold zone, 17 of 25 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 68%.
Following a +3.99% 3-day Advance, the price is estimated to grow further. Considering data from situations where CMI advanced for three days, in 218 of 333 cases, the price rose further within the following month. The odds of a continued upward trend are 65%.
CMI may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In 173 of 309 cases where CMI Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 56%.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 29, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on CMI as a result. In 52 of 84 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 62%.
The Moving Average Convergence Divergence Histogram (MACD) for CMI turned negative on October 30, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 48 similar instances when the indicator turned negative. In 30 of the 48 cases the stock turned lower in the days that followed. This puts the odds of success at 62%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where CMI declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 56%.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 44 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 48 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 74, placing this stock slightly better than average.
The Tickeron PE Growth Rating for this company is 55 (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 64 (best 1 - 100 worst), indicating fairly steady price growth. CMI’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 69 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (4.823) is normal, around the industry mean (3.843). P/E Ratio (22.904) is within average values for comparable stocks, (36.971). Projected Growth (PEG Ratio) (1.044) is also within normal values, averaging (1.879). Dividend Yield (0.020) settles around the average of (0.032) among similar stocks. P/S Ratio (2.110) is also within normal values, averaging (189.487).
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General Information
a maker of diesel and natural gas engines
Industry IndustrialMachinery
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