Should I buy Cummins stock in 2025? Expert Analysis for South Africans

What is Cummins?

How much is the Cummins stock?

The price of Cummins stock is rising this week. Currently, Cummins (NYSE: CMI) trades at $324.86, reflecting a 0.56% increase over the past 24 hours, though it's down 0.95% since last week.

With a price-to-earnings (P/E) ratio of 15.92 and a dividend yield of 2.25%, Cummins also posts a beta of 1.01, indicating average market volatility.

For South African investors, Cummins presents notable dividend potential combined with steady blue-chip stability.

Our complete analysis of the Cummins stock

After a rigorous evaluation of Cummins Inc.'s latest quarterly results, detailed stock performance across a rolling three-year horizon, and the integration of a broad suite of financial and technical indicators—including algorithmic analysis of trading data and peer benchmarking—a set of compelling signals has emerged. With notable resilience amid macroeconomic headwinds and recent positive surprises in earnings, the company’s trajectory now warrants fresh attention. So, why might Cummins stock once again become a strategic entry point into the global specialized industrials sector as we approach 2025?

Recent Performance and Market Context

Cummins (NYSE: CMI) is showing signs of renewed vigor, with its share price at $324.86 as of 30 May 2025. Over the past year, the stock gained +18.4%, significantly outperforming many industrial peers and the broader sector, despite a -13.4% dip over the past six months. This divergence reflects a period of sector rotation and profit-taking but also a solid base of investor support.

Recent catalysts include Q1 2025 results that delivered a headline EPS of $5.96—soaring 23% above analyst consensus (estimates at $4.83). This earnings “beat” was swiftly followed by a major upgrade from Goldman Sachs, shifting from “Neutral” to “Buy” with a new price target of $431 and signaling high-level institutional conviction. The stock now sits just above a key technical support zone ($321.76), and within reach of short-term resistance ($327.31), a structure that often precedes momentum swings.

From a macro perspective, the upward trajectory of industrial automation, infrastructure spending, and especially the global data center build-out is providing a supportive backdrop. Cummins, with its broad portfolio across engines, power systems, and newly emergent electrification technologies, is structurally positioned to capitalize as investment pivots into resilient, value-adding industrials.

Technical Analysis

The current technical canvas for Cummins underlines both sustained resilience and an emerging upside bias:

• Relative Strength Index (14-day): 53.5 — firmly neutral, signalling neither “overbought” nor “oversold” and leaving plenty of headroom for further rallies.
• MACD: Slightly negative at -0.26, generally interpreted as a minor short-term cooling, but with no indication of a downward trend acceleration.
• Moving Averages: The price action above the 5, 20, 50, and crucially the 200-day moving averages delivers a clear “buy” bias across these timeframes. The only minor caveat—a technical “sell” at the 100-day moving average—may signal a short-term consolidation phase rather than any structural weakness.
• Support/Resistance: The present price hovers just above key technical support at $321.76, while major resistance at $387.90 (the 52-week high) forms an obvious upside target. This setup, especially with a stochastic RSI at 88.6 (“overbought”), often coincides with breakouts after brief consolidations.

The technical “consensus” remains neutral, but the overwhelming “Strong Buy” signals from moving averages point to an impending inflection. For short- and medium-term traders, this combination of consolidating technical support, bullish average configurations, and muted selling pressure, is suggestive of a favorable entry point ahead of anticipated catalysts.

Fundamental Analysis

Despite a marginal revenue contraction in Q1 (-3% YoY), Cummins’ underlying profitability remains robust: a 17.9% EBITDA margin and net income of $824m (10.1% of revenue) underscore cost discipline and operational leverage. More telling, the company’s EPS performance exceeded estimates by 23%, suggesting resilient demand and adept execution through price management and product mix.

Valuation continues to appeal: at a trailing P/E of 15.9 and a forward dividend yield of 2.25%, Cummins stacks up attractively against both sector averages and lower-multiple industrial benchmarks. The company’s Price/Earnings Growth (PEG) and Price/Sales (P/S) metrics reflect justified optimism amid prudent projections. Notably, consensus analyst targets cluster at $346.80 (7% upside from current levels), while more bullish outliers reach $422–431 (potential ~30%).

Structurally, Cummins offers unique depth:

• Innovation: Aggressive investment in electrification (Accelera division) and hydrogen technologies positions CMI at the vanguard of the industrial energy transition—turning ESG tailwinds into tangible growth drivers.
• Market presence: Over 100 years of brand strength, global reach, and category leadership across five business segments (Engine, Distribution, Components, Power Systems, Accelera) cement its competitive “moats.”
• Strategic expansion: Increasing exposure to data centers and emerging-market infrastructure insulates future growth prospects against cyclical risks.

Volume and Liquidity

Liquidity is a further pillar supporting strategic entry: with an average daily volume approaching 934,000 shares and a $44.8bn market cap, CMI provides ample depth for institutions and retail entrants alike. The healthy float, combined with a beta of 1.01, reflects both desirable dynamism and relative stability—encouraging for those seeking a mix of growth and capital preservation in turbulent markets. Sustained volumes through recent volatility are a strong vote of market confidence.

Catalysts and Positive Outlook

Looking forward, Cummins is levered to a series of credible, multi-year growth catalysts:

• Data Center Expansion: As global cloud demand accelerates, backup power and next-generation power management (a Cummins forte) see mounting structural demand.
• Energy Transition: Large-scale investment in hydrogen fuel cell technology and electrification (notably through Accelera) positions Cummins to benefit from regulatory shifts and green infrastructure funding.
• Geographic Diversification: Ongoing expansion into high-growth, underpenetrated markets offers outsized opportunity, especially as developed-market cycles mature.
• Technological Leadership: Excellence in clean diesel and hybrid solutions keeps Cummins the supplier of choice for industrial, commercial vehicle, and power generation clients globally.
• Recent Strategic Endorsements: Major house upgrades by analysts (notably Goldman Sachs), alongside broad “overweight” sector calls, underpin a positive sentiment trend.

The tailwinds from these catalysts are reinforced by prudent capital allocation: visible commitment to dividend growth, ongoing innovation investment, and acquisition strategies that favor long-duration assets—all aligning to a robust, sustainable growth outlook.

Investment Strategies

Whether approaching Cummins for a tactical trade, a medium-term swing, or a strategic portfolio anchor, the present setup appears particularly appealing:

• Short-Term (0–3 months): Trading near a technical low, with fundamental momentum, presents a high-probability rally setup as the market prices in recent earnings beats and positive analyst revisions.
• Medium-Term (3–12 months): Forthcoming catalysts—institutional upgrades, new product rollouts, and further visibility on energy transition investments—could drive systematic re-rating, particularly as technical resistance is tested.
• Long-Term (12+ months): For patient capital, Cummins' positioning in decarbonization, data center infrastructure, and emerging markets presents a sustained runway for above-market performance. The dividend profile provides ballast, supporting yield-based strategies amid anticipated further capital appreciation.

Investors may find ideal positioning by accumulating near present support levels or incrementally ahead of identifiable catalysts (results, product launches, or regulatory milestones).

Is it the Right Time to Buy Cummins?

In summary, Cummins combines long-standing market leadership, innovation-driven growth, and financial discipline with a technical posture that signals fresh upside potential. The convergence of strong fundamentals—robust operating margins, consistent outperformance of earnings expectations, and attractive relative valuation—justifies renewed interest. Meanwhile, the technical and volume landscape points towards a likely bullish phase as the company pivots to capture the next wave of sector growth.

With a consensus view tilted positively, visibility on structural catalysts, and a rare alignment of favorable technical and fundamental factors, Cummins seems to represent an excellent opportunity for investors seeking dynamic exposure to the global industrial innovation cycle.

For those seeking conviction in the industrials space, Cummins offers a compelling blend of current value and future upside—a stock that warrants close attention as both short-term momentum and long-term structural growth coalesce at this strategic juncture.

How to buy Cummins stock in South Africa?

Buying shares of Cummins Inc. (NYSE: CMI) online has never been simpler or more secure for South African investors, thanks to regulated brokers offering both access to US stocks and consumer protections. You can purchase Cummins stock directly (the “spot” method), giving you actual shares, or you can trade via CFDs (“contracts for difference”), which enable you to speculate on price movements without owning the shares. Each method offers different benefits and risk profiles. To help you choose confidently, we break down the options below—including how to compare fees and broker features later on this page.

Spot Buying

Spot or “cash” buying means you acquire real Cummins shares, which are then held in your brokerage account. This approach is ideal for long-term investors looking to benefit from potential share price growth and dividends. South African investors typically pay a fixed brokerage commission per order—often between R80 and R250—plus small platform or custody fees.

Example

With the current Cummins share price at $324.86 (about R6,100 at an exchange rate of R18.80/USD), a R19,000 investment (about $1,000) minus an estimated $5 (R95) brokerage fee allows you to buy approximately 3 shares.

• Gain scenario: If the share price rises by 10% to about $357.35, your shares are now worth about $1,100 (R20,680).
• Result: That’s a gross gain of $100, or 10% on your investment (excluding fees and currency changes).

Trading via CFD

CFD (Contract for Difference) trading lets you speculate on Cummins’ share price with leverage, meaning you don’t own the actual shares but can profit from both upward and downward movements. With CFDs, you pay the “spread” (the difference between the buy and sell price) and possibly an overnight financing fee if you keep positions open past the trading day.

Example

You deposit $1,000 (around R19,000) and use 5x leverage, giving you exposure to $5,000 in Cummins shares.

• Gain scenario: If Cummins’ price rises by 8%, your position increases by 40% (8% × 5).
• Result: That’s a $400 (R7,600) gain on your $1,000 investment (before fees).

Final Advice

Before investing, always compare the costs, platform reliability, regulation, and trading tools offered by each broker. Fees can significantly impact your return, especially for active traders or users of leverage. Your choice between cash buying and CFDs should align with your financial goals—whether you aim to build long-term wealth or seek short-term opportunities. You can use our broker comparison tool further down this page to find the best fit for your needs as a South African investor.

Our 7 tips for buying Cummins stock

The latest news about Cummins

Goldman Sachs upgraded Cummins to "Buy" with a target price of $431 on 27 May 2025. This significant upward revision reflects renewed analyst confidence in Cummins’ earnings power and strategic initiatives, citing robust demand for its advanced power systems and a favourable position in the global energy transition. For South African investors and clients exposed to infrastructure or resource sectors, this positive coverage supports CMI’s attractiveness as a diversifying US industrial play, further underlining its global visibility and potential relevance for local partnership or procurement strategies.

First quarter 2025 results exceeded analyst expectations, beating consensus earnings by 23%. Cummins reported Q1 2025 earnings per share of $5.96 versus an expected $4.83, on revenues of $8.2 billion, confirming the company's resilience despite a modest year-on-year revenue decline. This outperformance demonstrates solid operational management, cost discipline, and pricing power—qualities that are especially valued in industrial suppliers by South African institutions monitoring multinationals operating in challenging macro-environments.

Technical momentum is strong, with multiple moving averages indicating a “Strong Buy” signal despite a neutral overall consensus. Short- and medium-term moving averages (5, 20, 50, and 200 days) all signal buying opportunities, supported by a relative strength index (RSI) in the neutral zone and a stochastics RSI reading that confirms strong short-term momentum. For South African market watchers, Cummins’ technical profile indicates ongoing investor interest and robust liquidity, enhancing its suitability in tactical asset allocations or for tracking in global industrial sector ETFs traded locally.

Cummins continues to advance its clean energy and electrification strategy, including technology relevant to Africa’s power needs. The company is expanding via its Accelera division into hydrogen and electrified powertrains, aligning with global and African regional imperatives for cleaner, reliable, and decentralized power solutions. This is particularly relevant to South Africa, where energy infrastructure needs are acute, suggesting potential collaboration opportunities, direct procurement, or technology transfer models benefiting local industries and government de-carbonisation efforts.

The dividend yield remains attractive at 2.25%, with robust cash flow reaffirmed for payouts as of 23 May 2025. Cummins’ quarterly dividend of $1.82 underscores ongoing shareholder returns supported by stable financial performance. With institutional investors in South Africa increasingly seeking global dividend-paying equities to hedge local risks, CMI’s payout characteristics and reliable history may offer a valuable addition to income-oriented portfolios, especially given exchange control regulations and diversification requirements.

FAQ

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.