Cummins’ Q3 Results Show Demand Remains Solid in Truck Markets

Cummins reported solid third-quarter results, roughly in line with our expectations. As a result, our $241 fair value estimate remains unchanged. Demand remains healthy across Cummins’ end markets, except for China (affected by COVID-19-related lockdowns). Management commented on its expectations for solid market growth in 2023, thanks to high truck utilization and elevated average fleet ages. In addition, new trucks equipped with new powertrains present fleet owners with better fuel efficiency, especially during a period of higher fuel prices. For 2022, Cummins is expecting the North America on-highway engine market to come in at 260,000 units (up 15% versus 2021), near the top end of its previous guidance range.