Cummins heads into the back half of June with analyst conviction running unusually high — and short sellers moving in the opposite direction with unusual speed.
The analyst story is the headline this week. Wells Fargo's Jerry Revich lifted his price target on Cummins to $874 from $794 this morning, keeping his Overweight rating, and he isn't alone in the bullish camp. UBS upgraded the stock to Buy on June 8, raising its target from $565 to $850 — a dramatic shift in view. Argus, Raymond James, Barclays, Morgan Stanley, and Wells Fargo itself (in an earlier May 6 note) all raised targets in recent weeks. The mean analyst target now sits at $744, roughly 6% above the current price of $699.97, though Wells Fargo and UBS are calling for returns significantly beyond that. JPMorgan remains the lone holdout in the positive camp, maintaining a Neutral rating even after lifting its target to $725. The directional message from the Street is almost uniformly constructive.
The bull case rests on Cummins' power generation momentum. The company guided FY2026 revenues to $34.7–$36.4 billion, underpinned by an 18% surge in Power Systems sales and a 7.5% rise in Distribution sales — both beating expectations. Adjusted EPS grew 12.5% year-over-year. Bears point to the other side of the ledger: gross margins fell 120 basis points to 22.9%, tariffs are biting into North American truck economics, and China demand for heavy-duty trucks remains weak. The EPS momentum scores tell the more optimistic near-term story — 30-day and 90-day earnings momentum rank in the 74th and 77th percentiles respectively, and the 12-month forward EPS growth score reaches the 93rd percentile. Where the data is less flattering is valuation: the EV/EBITDA has drifted to 14.3x, up roughly 0.2 turns over 30 days, and the trailing PE has climbed to 22.3x as the stock gained 5% this week alone.
Short interest tells a notably different story from the analyst optimism — and it's worth pausing on the contrast. Bears have been quietly rebuilding positions through June. Short interest climbed 29% on the week to 1.6% of free float, touching its highest level since early May. That follows a pattern: SI troughed around 1.6 million shares in late May, drifted lower through the first week of June, then jumped sharply from roughly 1.7 million to 2.2 million shares between June 8 and June 16. The absolute level remains low — 1.6% of float is nowhere near alarming — but the pace of rebuilding is notable given the stock's strong performance. Borrow conditions offer no friction to further shorting: availability is effectively uncapped, with more than 120 million shares available to borrow against a short position of roughly 2.2 million. Cost to borrow remains negligible at 0.51%, well below any level that would pressure existing shorts. The short score of 30.8 sits in the 63rd percentile — elevated but not extreme.
Options positioning is calm by comparison. The put/call ratio is running at 0.89, barely above its 20-day average of 0.88 — a z-score of just 0.33 — suggesting options traders are not adding meaningful directional hedges ahead of the August 3 earnings print. The PCR was noticeably higher through the first two weeks of June, in the 0.91–0.92 range, and has eased back as the stock rallied. That easing is consistent with reduced near-term anxiety rather than increased conviction either way. Among peers, CAT gained 3.4% on the week and NPO surged 8.7%, making Cummins' 4.6% gain look solid but not exceptional within the industrial machinery group.
The setup heading into August earnings is therefore a study in divergence: the Street has rarely been more aligned on the upside case, the stock is grinding toward new highs, and yet short sellers are adding positions at their fastest clip in months — all in a borrow market with essentially no friction to do so. Whether the short rebuilding reflects a tariff-driven margin thesis, hedging against the strong recent run, or something more specific to the Q2 print will be the question worth tracking in the weeks ahead.
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