Core Viewpoint - Wolfe Research downgraded Cummins from Outperform to Peerperform due to limited remaining upside after strong share price performance [1] Group 1: Stock Performance - Cummins was the second-best performing stock in Wolfe's coverage universe last year, with a share price increase of 46% [1] - The stock had already outperformed in 2024 prior to the downgrade [1] Group 2: Market Conditions and Expectations - Power generation sales and margins have continued to exceed expectations, contributing to Wolfe's optimism about a Class 8 recovery [2] - Improving truckload spot rates and clarity around EPA 2027 regulations have further supported this positive outlook [2] Group 3: Earnings Estimates - Wolfe raised its 2027 earnings estimate for Cummins by 6% to $32 per share, surpassing consensus forecasts [3] - Despite this increase, applying a 20 times earnings multiple suggests only about 12% upside potential [3] Group 4: Risk-Reward Assessment - With shares trading above the previous upside target, Wolfe indicated that the risk-reward profile has become less compelling [4] - The decision to lower the rating to Peerperform reflects this assessment of reduced attractiveness in the stock [4]