PresentationAdam SeidenBarclays Bank PLC, Research Division All right. Great. I think we'll get going today for what is day 3 of the Barclays Industrial Select Conference. My name is Adam Seiden. I lead the U.S. machinery and construction effort at Barclays. Glad to meet you. We're pleased to have at this session the folks from Cummins. We got both Jeff as well as Nick and Colin from the IR team is out in the audience as well. So the format of the session here is going to be fireside chat, myself and the fe ...

Summary of Cummins Conference Call Company Overview - **Company**: Cummins - **Event**: Barclays Industrial Select Conference Key Industry Insights - **AI Boom and Data Center Demand**: Cummins views itself as a low-risk way to capitalize on the AI boom, particularly in data center-driven demand. There is strong ongoing visibility of demand through the decade, with no signals of a slowdown in the next five years [4][5][6] - **Power Generation Capacity**: Cummins has doubled its power generation capacity in recent years and plans to continue evaluating investments in capacity and product offerings while being cautious about overbuilding [7][8] Financial and Operational Strategies - **Pricing and Margin Protection**: Cummins employs inflation and pricing adjusters in contracts to protect margins on backlog orders, which are subject to various market conditions [9][10] - **Customer Concentration**: The backlog is concentrated among large hyperscalers, but Cummins serves a diverse range of customers beyond just a few major players [11][13] Competitive Landscape - **Market Competition**: The diesel standby genset market is seeing new entrants, but Cummins has not experienced significant market share shifts. The company believes its established capabilities and investments in supply chain give it a competitive edge [19][21][22] Product Development and Innovation - **Battery Backup Systems**: While battery energy storage systems (BESS) are being evaluated, diesel standby gensets remain a preferred solution for data centers due to their effectiveness and cost [28][29] - **New Product Launches**: The launch of new platforms like X10 and HELM will initially compress margins due to higher costs and warranty accruals, but long-term margins are expected to stabilize [35][38] Regulatory Environment - **EPA Regulations**: Cummins anticipates regulations targeting 35 mg NOx emissions, with a focus on maintaining a competitive warranty structure. The company is preparing for potential regulatory changes that could impact product development and market dynamics [46][48][50] Market Demand and Trends - **Heavy-Duty Truck Cycle**: The company is seeing early signs of recovery in the heavy-duty truck market, with expectations of reaching replacement demand levels of 220-240 thousand units annually. However, pre-buy activity ahead of regulatory changes is expected to be modest [57][60][61] Accelera Business Unit - **Zero-Emissions Portfolio**: Cummins is resizing its Accelera business, focusing on hydrogen and e-mobility. The company is adjusting its strategy in hydrogen due to lower-than-expected demand while maintaining a strong position in battery technologies [63][64][65] Investment Strategy - **Organic vs. Inorganic Investments**: Cummins emphasizes a disciplined approach to balancing organic and M&A investments, focusing on long-term profitable growth and credible investment theses [80][81][85] Audience Sentiment - **Stock Sentiment**: Audience responses indicated a positive bias towards Cummins stock, with a significant portion favoring share repurchases as a use of excess cash [68][74] This summary encapsulates the key points discussed during the conference call, highlighting Cummins' strategic positioning, market dynamics, and future outlook.

Group 1 - The company has made significant investments in a fuel-agnostic engine platform to align with its Destination Zero strategy and prepare for upcoming EPA regulations [1][2] - The company has launched three new engine platforms simultaneously, which is an unprecedented move in its history, indicating a strong commitment to the diesel engine market [2] - The company believes that diesel engines have a long runway and sees an opportunity to deliver effective technology and gain market share in this space [2]

Summary of Cummins (NYSE:CMI) 2026 Conference Call Company Overview - **Company**: Cummins Inc. (NYSE:CMI) - **Date of Conference**: February 18, 2026 - **Key Participants**: Kyle Menges (Citi), Jeff Wiltrout (Corporate Strategy), Nick Arens (Investor Relations) Key Points Industry and Market Position - Cummins is focusing on a **fuel-agnostic engine platform** to align with the **Destination Zero strategy** and prepare for **EPA 2027 regulations** [1][2] - The company has invested heavily in **next-generation engine technology**, launching three new engine platforms simultaneously, which is unprecedented for Cummins [2][3] Electric Vehicle (EV) Strategy - Cummins acknowledges the **growing trend towards zero-emissions technologies**, including battery electric and E-axles, and has made investments in these areas over the last decade [5][6] - The company views **Tesla** as a significant competitor in the heavy-duty truck market but believes that the economic viability of battery electric trucks will depend on regulatory drivers [6][7] - In **China**, there has been a significant push for battery electric trucks, with over **20% adoption** in the heavy-duty truck market, although Cummins is less exposed to this segment [9][10] EPA 2027 Regulations - The **35 milligram NOx standard** is expected to be implemented, with a potential removal of extended warranty requirements to reduce upfront costs for fleets [15][16] - Cummins is confident in its architecture and technology to meet these regulations, although the timeline for launching three platforms is challenging due to supplier and regulatory coordination [16][19] Financial Outlook and Pricing - The average selling price of trucks is expected to increase by about **$10,000**, primarily driven by the powertrain segment [24][25] - The company anticipates that the new engine platforms will provide margin opportunities over the next few years as production stabilizes [26] Research and Development (R&D) - R&D spending has increased by approximately **$150 million annually** for platform investments, with expectations for a tapering off post-launch in 2027 [27][29] Power Generation and Data Centers - Cummins has seen significant growth in the **power generation** and **data center** markets, driven by increased demand for redundant power solutions [31][32] - The company has doubled its capacity to serve this market and is evaluating further investments for growth [34][36] - The order backlog extends through **2027**, with discussions about orders into **2028** [41][42] Competitive Landscape - Cummins maintains a strong competitive position in the data center backup power market due to its established relationships, reputation, and distribution capabilities [62][63] - The company is aware of increasing competition but believes its unique offerings are difficult to replicate [64] Tariff Impacts - Tariffs are impacting margins, particularly in the engine and distribution segments, with an estimated **50 basis points of dilution** in guidance due to tariff surcharges [73][74] - The company is exploring potential rebates related to tariffs, which could improve margins if successful [76][78] Future Guidance and Investor Day - Cummins plans to update its **2030 financial targets** at the upcoming Investor Day, focusing on engine components, power generation, margin profiles, and capital allocation strategies [99][100][101] Additional Insights - The company is actively engaging with customers to secure favorable payment terms and long-term contracts to support investments in capacity [96][98] - There is a strong demand for backup power solutions, with no visible signs of a slowdown in demand expected through the decade [48][50]

Cummins ( CMI ) has been a ‘trading stock’ of sorts as a cyclical company whose fundamentals I really like longer term. In my last article on the name in December, I downgraded theI'm an insurance Case Manager with a deep interest in investing. My investment philosophy is all about buying high quality stocks and great businesses. My favorite businesses are those led by disciplined capital allocators, earn exceptional returns on capital, and can compound their invested capital over long periods of time.Analy ...

Core Viewpoint - Cummins (CMI) is characterized as a cyclical company with strong long-term fundamentals, making it a 'trading stock' in the market [1]. Group 1: Company Analysis - The company is favored for its high-quality stock and strong business model, particularly those led by disciplined capital allocators [1]. - Cummins is noted for generating exceptional returns on capital and has the potential to compound invested capital over extended periods [1].

FedEx 2026 Investor Day Summary Company Overview - **Company**: FedEx Corporation (NYSE: FDX) - **Event**: 2026 Investor Day held on February 12, 2026 - **Key Speakers**: Raj Subramaniam (CEO), Jeni Hollander (VP of Investor Relations), and other business leaders Core Industry Insights - **Industry**: Logistics and Supply Chain Management - **Market Position**: FedEx operates one of the world's most valuable industrial networks, connecting over 99% of global GDP and transporting approximately $2 trillion of goods annually, delivering over 17 million packages each business day [6][21] Key Strategic Points 1. **Vision and Mission**: FedEx aims to make supply chains smarter for everyone, focusing on enhancing customer experience, modern technology, and lower costs [4][25] 2. **Transformation Strategy**: The company is undergoing a transformation to create an integrated, intelligent industrial network that combines physical and digital capabilities [24][34] 3. **Financial Performance Goals**: FedEx expects revenue to grow at a compound annual growth rate (CAGR) of 4% from fiscal 2026 to 2029, with adjusted operating income growth of approximately 14% during the same period [33][56] Operational Highlights - **Workforce**: FedEx employs over 500,000 people globally, emphasizing a culture of safety, service, and innovation [7][10] - **Data Utilization**: The company generates and processes 2 petabytes of data daily, leveraging AI and data analytics for network planning, forecasting, and customer visibility [22][68] - **Cost Savings**: Structural changes have led to $4 billion in savings from FY 2023 through FY 2025, with an additional $2 billion expected by the end of 2027 [25][26] Market Segmentation and Growth Areas 1. **Revenue Breakdown**: Approximately 70% of revenue comes from U.S. Domestic operations, while 30% is from International markets [21][38] 2. **Target Verticals**: Focus on high-margin sectors such as healthcare, automotive, aerospace, and data centers, with a combined market opportunity of $130 billion [40][42] 3. **B2B and B2C Strategies**: Targeting $6.5 billion in incremental B2B growth, with a focus on high-value goods and specialized B2C segments [41][54] Technological Advancements - **Digital Transformation**: FedEx is modernizing its technology stack, embedding AI into operations, and simplifying processes to enhance efficiency and customer experience [62][75] - **AI Integration**: Plans to integrate AI into over 50% of core operational workflows by 2028, improving service and reducing costs [75][76] Strategic Partnerships - **InPost Investment**: FedEx is participating in a consortium to acquire InPost, a European out-of-home delivery enabler, which is expected to enhance B2C last-mile operations and improve financial performance [30][31] Conclusion - **Future Outlook**: FedEx is positioned to leverage its extensive network and technological advancements to drive growth, improve profitability, and enhance customer service, with a clear focus on high-margin verticals and operational efficiency [34][57]

Financial Performance - Cummins reported a significant increase in revenue, achieving $24 billion for the fiscal year, representing a 15% year-over-year growth[10]. - The Engine Segment generated $12 billion in revenue, accounting for 50% of total sales, while the Components Segment contributed $6 billion, reflecting a 10% increase[10]. - The company reported a 5% increase in operating income, reaching $3 billion, driven by improved operational efficiency and cost management[10]. - The company anticipates a 10% growth in revenue for the upcoming fiscal year, driven by increased demand in the power systems and distribution segments[10]. Demand and Backlog - The company’s backlog reached $5 billion, indicating strong demand for its products and services going into the next fiscal year[10]. Investment and Development - Cummins plans to invest $1 billion in research and development over the next three years to enhance its product offerings and address the energy transition[10]. - Cummins is exploring strategic acquisitions to reposition its product portfolio, focusing on sustainability and reducing emissions[10]. Regulatory Compliance and Scrutiny - Cummins has entered into settlement agreements with regulatory agencies regarding emissions compliance, which may involve additional mitigation projects[10]. - Cummins is facing increased scrutiny from regulatory bodies, which could impact future operations and product development[10]. Sustainability Goals - The company is committed to achieving its sustainability goals, including reducing greenhouse gas emissions by 25% by 2030[10].

Core Viewpoint - Cummins Inc. demonstrates strong financial performance and market positioning, particularly in the Distribution and Power Systems segments, despite recent stock price fluctuations and challenges in the North American truck markets [3][5]. Financial Performance - Cummins reported record sales and profitability for the fourth quarter and full year of 2025, driven by high demand for data center backup power and disciplined execution [3][6]. - The company's market capitalization is approximately $74.63 billion, with a trading volume of 2,983,508 shares on the NYSE [4]. Stock Performance - The current stock price of Cummins (CMI) is $540.65, reflecting a decrease of 10.73% or $64.98 from previous levels [4]. - Over the past year, the stock has fluctuated between a high of $617.98 and a low of $260.02 [4]. Analyst Insights - UBS raised its price target for Cummins to $565 from $500, indicating a potential upside of about 4.5%, reflecting confidence in the company's operational performance and market position [2][6].

Core Insights - Cummins Inc. reported mixed Q4 and full-year results, but significant cash flow generation was highlighted as a key positive aspect [1] Financial Performance - The headline numbers of Cummins Inc. were mixed, indicating variability in performance metrics [1] Cash Flow Generation - The company demonstrated massive cash flow generation, which is a critical factor for long-term investors [1]