- Cummins shares have underperformed, as investors debate the length/depth of the next cyclical downturn for heavy-duty trucks and how quickly new technologies like hydrogen will contribute real profits.
- Management may be preparing to spin off filtration; a move that could make sense in terms of the strategic moves needed to reposition the business for long-term success.
- Healthy profits from the diesel business will fund further product development in hydrogen/electrification technology and should offset lower new-tech margins during their initial ramps.
- Cummins is always a good stock to watch on cyclical downturns, but the downturn-to-date is only about half of what has been typical in past downturns.
For further details see:
Cummins Stock Looking More Tempting, But Cycle Risk Remains A Concern