Cummins: Investor Day 2026: Measured Power Build; Optionality Preserved

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Cummins: Investor Day 2026: Measured Power Build; Optionality Preserved

Barclays | Cummins

but really focused on an integrated offering across aftertreatment, battery energy storage

systems, and the natural gas platform. These engines could be used in multiple end markets. 4)

The investments CMI’s making in power are relatively measured. As they put it, and we agree,

they’re “strengthening parts other portfolio where it’s working and expanding where demand is

real”. They’ll likely face some investor pushback that eventually backup power isn’t needed to

the same magnitude that it is today and/or the nat gas gen-sets are superfluous, but that’s

where the optionality kicks in, too, in our view.

The path that Cummins gave is practical and achievable with plenty of degrees of freedom

(no specific segment targets, goals with “+” and “>” then in them). The setup for the day

was a tough one, though, as one camp wanted them to announce a big splash into prime. We

never were in that camp, we didn’t get it, and that’s disappointing to those folks. Another camp

saw a further deepening into backup and/or a nat. gas engine platform as exposing their

weakness if/when grid connection happens and reliability improves. So kind of “hurt if you do

(announce capacity), hurt if you don’t”. The route that CMI chose is prudent with a right to

participate where it could differentiate while also preserving optionality and establishing a

“lowish” bar. At almost $10bn of op profit, if our back calculation is right, CMI would be saying

that it could double 2025 OP. That’s nothing to sneeze at.

Side note, we did get the higher highs and higher lows cycle/cycle chart from CMI. Still looks as

nice as ever. Having the next trough higher than this one will be a challenge, though. Also, we