Cummins Faces Macro Uncertainty, Inflation and EPA 2027 Concerns, UBS Says

11:51 AM EDT, 09/30/2026 (MT Newswires) -- Cummins (CMI) faces complications from uncertainty surrounding the economy and the Environmental Protection Agency's 2027 regulations, UBS analysts said in a Tuesday note. Analysts said consensus estimates of the company's 2027 and 2028 revenues and margins do not precisely reflect the mechanics of the Environmental Protection Agency policy. UBS said the company may capture customer demand despite lower margins in 2027, as the demand will likely be for legacy engines. Analysts still expect record earnings over the next couple of years, with a modest replacement cycle in natural gas trucks and strong global backup power demand for data centers. Cummins benefits from data center growth because it provides backup and primary power to support AI energy demands. UBS added that in 2028, demand will likely shift toward compliant engines as customer confidence in the new technology increases. While the company should incur a significant warranty expense headwind during this period, it expects profitability of the new engines to be similar or better and existing ones. Analysts retained a buy rating on the stock, but lowered its price target to $741 from $835. Price: 518.54, Change: -2.84, Percent Change: -0.54