Cummins Inc (CMI): APAC Meeting Recap: Introducing Dec 27 PT at $600

J.P. Morgan hosted Cummins' (CMI) Executive Director, Investor Relations and Business Analysis & Planning, Nick Arens, with APAC investors on a virtual call earlier this week. We maintain our Neutral rating and introduce a Dec 27 price target of $600 (prior Dec-26 PT: $690), based on ~10x FY28 EV/EBITDA and ~15x FY28 PE, in line with the current valuation. We model FY26/27/28 EPS of $29.64/$34.04/$40.06, raising our 2027 adjusted EPS forecast by 3.1% to $34.04. The recent sell-off was driven by investor skittishness about moderating incremental margins in 2027, backup power exposure to data centers amid overcapacity concerns, and 2027 truck demand uncertainty amid record diesel prices, though we still expect mid-teens% EPS CAGR over the next couple of years. Key takeaways: 2026 truck demand looks more replacement-led than pre-buy-led, with management raising its 2026 Class 8 / Group 2 market guide to ~245k from ~235k;