CMI has attracted a wave of upward analyst revisions over the past month. Now options sentiment is shifting more defensive — even as short sellers retreat.
Seven firms lifted price targets on Cummins in a single week following May earnings. Argus Research raised its target to $770 on June 1. Raymond James moved to $745 on May 26. Barclays went furthest, lifting to $760 from $610 after the print. Wells Fargo sits at $794 — the highest on the Street. The consensus mean now stands at $725.12, above the current price of $682.33. That implies roughly 6% upside to the average target alone, with the most bullish calls offering closer to 16%.
The bull case centers on Power Systems. Segment sales rose 18% in the quarter. Full-year 2026 revenue guidance was raised to $34.7–$36.4 billion. Adjusted EPS grew 12.5% year-over-year. The bear case is real, though: gross margins compressed 120 basis points to 22.9%, tariff headwinds persist, and North American truck volumes are softer.
The put/call ratio hit 0.92 on June 3 — the highest reading in two weeks. That's a z-score of 2.04 versus the 20-day mean of 0.86. Options traders are buying more protection as the stock climbs. CMI is up 1.4% today to $682.33, and up 3.8% over the past month. The rising PCR suggests some participants are hedging rather than adding to longs at these levels.
SI sits at just 1.25% of free float — a multi-month low. Short interest has fallen 16.6% over the past month. With availability essentially unlimited (the lending pool is extremely loose), there is no mechanical squeeze pressure here. Still, cost to borrow has risen 57% over the past week to 0.46%. That remains historically low in absolute terms. It could simply reflect routine re-pricing as some incremental short demand returns — not a meaningful tightening.
EPS momentum scores are strong: 89th percentile over 30 days, 93rd percentile on 12-month forward EPS growth year-over-year. The dividend score ranks at the 98th percentile. The ORTEX short score sits at 29.4 — modest, consistent with the low SI and loose availability.
What to watch: Whether the PCR elevation persists as CMI approaches the $725 consensus target, and whether the cost-to-borrow uptick accelerates into August earnings.
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