We publish no single base value for Cummins. Our valuation methods put it between $310.05 and $446.69 a share. The valuation code's reason: no point fair value: the two anchors behind it compound the same growth rate and differ only in how they end — a perpetuity at the terminal rate against a multiple on the final year — so the midpoint between them measures terminal treatment rather than what the business is worth. The published range is the same reading with the false precision removed: read it as the span the method supports, and treat neither edge as a point estimate.
| Method | Value | vs price | Basis |
|---|---|---|---|
| Discounted cash flow | $446.69 | -1.9% | free cash flow $3.46bn, growth 6.69% for 5 years, then fading to 3% over 5 more, discounted at 10.17%; stress floor $287.02 |
| Exit multiple (P/E) | $310.05 | -31.9% | earnings per share $27.73 valued at 14.19× (the stock's own median P/E) in 5 years, discounted back |
| Sum of the parts | — | — | no sum of the parts: this run holds no segment disclosure for the name |
| Price to sales | — | — | not reached: the cash-flow or earnings methods produced an anchor, so this fallback was not run |
| Tangible book | — | — | used only for lenders, where book value is the business |
| Price to FFO (REITs) | — | — | used only for REITs |
Each working is rebuilt by code from the valuation's own figures and checked against the published value.
The discount rate:
| Risk-free rate | 5.13% (10-year US Treasury yield) |
| Company's own beta | 1.25 (5 years of monthly returns against the S&P 500; standard error 0.20) |
| Peer beta | 1.01 (median of 79 S&P 500 Industrials companies) |
| Blend of own and peers | 1.18 (71% own, 29% peers, weighted by how precisely the company's own beta is measured) |
| Adjusted beta | 1.12 (0.67 × 1.18 + 0.33, pulled toward the market's 1.0) |
| Equity risk premium | 4.5% |
| Discount rate = risk-free + adjusted beta × premium | 10.17% |
Free cash flow grows 6.69% a year for 5 years, then fades in equal steps toward 3% over 5 more; each year is discounted by 1 ÷ (1 + rate)^year:
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Now | — | $3.46bn | — | — |
| Year 1 | 6.69% | $3.69bn | 0.9077 | $3.35bn |
| Year 2 | 6.69% | $3.94bn | 0.8239 | $3.25bn |
| Year 3 | 6.69% | $4.20bn | 0.7478 | $3.14bn |
| Year 4 | 6.69% | $4.49bn | 0.6788 | $3.04bn |
| Year 5 | 6.69% | $4.79bn | 0.6161 | $2.95bn |
| Year 6 | 6.08% | $5.08bn | 0.5593 | $2.84bn |
| Year 7 | 5.46% | $5.35bn | 0.5076 | $2.72bn |
| Year 8 | 4.85% | $5.61bn | 0.4608 | $2.59bn |
| Year 9 | 4.23% | $5.85bn | 0.4182 | $2.45bn |
| Year 10 | 3.61% | $6.06bn | 0.3796 | $2.30bn |
| Terminal value = year-10 cash flow × (1 + 3%) ÷ (10.17% − 3%) | $87.08bn |
| Terminal value in today's money | $33.06bn |
| Present value of years 1–10 | $28.63bn |
| Total present value | $61.69bn |
| Shares outstanding | 138.10m |
| Value per share = total ÷ shares | $446.69 |
How the DCF value moves with the discount rate and the starting growth (the middle cell is the published value):
| Discount rate | Growth 1.69% | Growth 6.69% | Growth 11.69% |
|---|---|---|---|
| 9.17% | $386.72 | $522.12 | $702.29 |
| 10.17% | $333.53 | $446.69 | — |
| 11.17% | $293.32 | $389.84 | — |
The same DCF at each beta, starting growth unchanged:
| Beta | Value | Discount rate | DCF value |
|---|---|---|---|
| Company's own beta | 1.25 | 10.75% | $411.64 |
| Peer beta | 1.01 | 9.68% | $481.19 |
| Adjusted beta (used) | 1.12 | 10.17% | $446.69 |
Earnings per share grow on the same fading path as the DCF:
| Year | Growth | Earnings per share |
|---|---|---|
| Now | — | $27.73 |
| Year 1 | 6.69% | $29.59 |
| Year 2 | 5.58% | $31.24 |
| Year 3 | 4.81% | $32.74 |
| Year 4 | 4.27% | $34.14 |
| Year 5 | 3.89% | $35.46 |
| Earnings per share in year 5 | $35.46 |
| Exit P/E (the stock's own median P/E) | 14.19× |
| Value in 5 years = earnings × P/E | $503.21 |
| Discounted at 10.17% over 5 years: ÷ 1.6230 | $310.05 |
We publish no single base value for Cummins. Our valuation methods put it between $310.05 and $446.69 a share. The valuation code's reason: no point fair value: the two anchors behind it compound the same growth rate and differ only in how they end — a perpetuity at the terminal rate against a multiple on the final year — so the midpoint between them measures terminal treatment rather than what the business is worth. The published range is the same reading with the false precision removed: read it as the span the method supports, and treat neither edge as a point estimate.
One-year price simulation: a 10% chance the price is below $326.66 and a 10% chance it is above $707.54 in a year; a 58% chance it is higher than today's $455.40, from 30% volatility. The simulation assumes the price drifts up at our discount rate of 10.17% a year.
At $455.40 the price implies free cash flow growing 7.0% a year for five years and then fading toward 3% over five more; its revenue has grown 6.7%.
| Week | Price | Base value |
|---|---|---|
| 2 Oct 2026 | $528.32 | — |
| 9 Oct 2026 | $523.39 | — |
| 16 Oct 2026 | $531.33 | — |
| 23 Oct 2026 | $517.40 | — |
| 30 Oct 2026 | $500.09 | — |
| 6 Nov 2026 | $450.07 | — |
| 12 Nov 2026 | $455.40 | — |
Data as of 12 Nov 2026; financials to 30 Sep 2026. Sources: company filings via EODHD, SEC EDGAR, US Treasury. How these values are computed. Not investment advice.
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