Cummins Inc (CMI): Lowering Estimates & PT

After the revenue miss and guidance cut, J.P. Morgan expects 2027 consensus to move lower and bears to stay put. CMI's 3Q sales missed consensus, but EPS and margins beat; the implied 4Q sales, margins and EPS guidance fell below consensus. CMI spoke to exceptionally strong power generation demand tied to data centers with orders exceeding expectations in 3Q, but investors are bracing for orders to slow in the coming quarters given the changing political discourse in the US. CMI's planned capacity expansion from 25GW to 55GW by 2030, with a year-over-year step up in 2028, will likely come with a valuation de-rating, especially since a supermajority of 2030 revenues will come from backup generator sets. EPA uncertainty is affecting customer timing, and CMI expects most North American truck engine production to remain on legacy platforms in FY27 while passing nonconformance penalty costs through to customers. Supply constraints and delayed installations explain part of the 3Q revenue sho