CMI trades against a final fair-value range of $423.89-$651.97, with the midpoint set by the accepted valuation synthesis rather than earlier draft model outputs. Fair value range: low $424, high $652, with mid-point at $537.
Currently screens above fair value, so patience matters more than entry speed.
Fair value
$537
Margin of safety
-32.0%
Confidence
81/100
Moat
9/10
Educational analysis only — not financial advice. Always do your own due diligence.
$709.57Price
Low $423.89
Mid $537.46
High $651.97
CMI trades against a final fair-value range of $423.89-$651.97, with the midpoint set by the accepted valuation synthesis rather than earlier draft model outputs.
Cycle upside
Near-term earnings momentum driven by operating leverage, robust legacy machinery replacement demand, and hybrid platforms bridging the technological gap safely.
§2 Olumsuz senaryo
A faster-than-expected global regulatory mandate for fully electric heavy-duty vehicles renders legacy engine intellectual property obsolete, stranding assets and severely depressing returns on invested capital before Accelera achieves scale.
Bu tezin bozulabileceği yollar
Accelerated ICE Obsolescence
· High
Global emission regulations tighten faster than expected, stranding highly profitable legacy diesel assets and crashing near-term FCF.
FV impact
Drives valuation toward the $423.89 bear-case floor.
Trigger
24-36 months
Accelera Margin Failure
· Medium
The Accelera clean energy segment fails to reach structural profitability despite heavy capital expenditures, permanently diluting corporate ROIC.
FV impact
Reduces long-term multiple to <15x, wiping out growth premium.
Trigger
36-60 months
Cyclical Freight Recession
· Medium
A deep downturn in global freight and construction markets coincides with peak EV transition spending, squeezing liquidity and margins simultaneously.
FV impact
Compresses near-term EPS estimates by >20%.
Trigger
12-24 months
İzlenecek erken uyarı sinyalleri
Metrik
Mevcut
Tetikleme eşiği
Operating margins decline below 11.0% for two consecutive quarters.
Monitor
Deterioration versus the report thesis
Accelera segment revenue growth fails to outpace legacy ICE decay over a 12-month trailing period.
Monitor
Deterioration versus the report thesis
Capital expenditures structurally exceed historical norms as a percentage of revenue without corresponding ROIC stabilization.
Monitor
Deterioration versus the report thesis
Peer median P/E compresses to <20x, signaling broader industrial multiple contraction.
Monitor
Deterioration versus the report thesis
Free cash flow conversion drops materially due to elevated maintenance and transition capex.
Based on our latest analysis, CMI looks meaningfully overvalued. The current price is $710 versus a composite fair-value midpoint of $537 (range $424–$652), which implies roughly 24.3% downside to the midpoint.
Our composite fair-value range for CMI is $424–$652, with a midpoint of $537. The range is triangulated across multiple valuation models (discounted earnings, forward earnings scenarios, peer multiples, and where applicable owner earnings or reverse DCF) and weighted by reliability for CMI's archetype.
Our current rating for CMI is Reduce with a confidence score of 81/100. CMI is rated Reduce at $709.57 versus the reconciled fair value midpoint of $537.46, implying -24.26% upside/downside. Confidence is separately disclosed at 81/100. This is research for educational purposes, not personalized investment advice.
The top risks our latest report flags for CMI are: Accelerated ICE Obsolescence; Accelera Margin Failure; Cyclical Freight Recession. The single biggest risk is Accelerated ICE Obsolescence: Global emission regulations tighten faster than expected, stranding highly profitable legacy diesel assets and crashing near-term FCF.
Our current rating for CMI is Reduce, issued with a confidence score of 81/100 and a moat score of 9/10. The rating reflects the composite fair-value range ($424–$652) versus the current price of $710.
CMI is classified as a mature compounder stock. Archetype determines how every downstream parameter — discount rate, terminal growth, deceleration curve, terminal multiple, scenario probability weights, scorecard weights, and which valuation models are prioritized — is calibrated for CMI.
