With a market cap of $56.6 billion, PACCAR Inc. (PCAR) is a leading manufacturer of heavy-duty trucks, diesel engines, and powertrain components. Based in Bellevue, Washington, it operates globally, distributing trucks under the Kenworth, Peterbilt, and DAF nameplates while providing aftermarket parts and financial services to its customers and dealers.
Shares of the truck maker have significantly outperformed the broader market over the past 52 weeks. PCAR has gained around 49% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 25.4%. However, in 2024, shares of PCAR are up 8.9%, slightly lagging behind SPX's 10.6% gains on a YTD basis.
Zooming in further, PCAR is also outpacing the S&P 500 Industrial Sector SPDR's (XLI) 23.8% gains over the past 52 weeks.
PACCAR has outperformed over the past year due to strong performance in its parts business, which boosted profitability, robust demand for its Kenworth and Peterbilt trucks, and strategic investments and innovations such as the integration of advanced telematics systems.
On April 30, the company reported stronger-than-expected Q1 earnings results, driven by strong demand for trucks and aftermarket parts. Furthermore, adding to the excitement, the company announced an 11% increase in its quarterly dividend payment on the same day. Since then, the stock has ended most of its trading sessions green, reflecting investor enthusiasm and confidence in its performance.
For the current fiscal year, ending in December, analysts expect PCAR's EPS to decline by 14.1% to $8.26. However, the company's earnings surprise history is promising. It holds a solid track record of consistently surpassing the consensus estimates in each of the last four quarters.
Among the 16 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on five “Strong Buy” ratings, one “Moderate Buy,” and 10 “Holds.”
This configuration is more bullish than three months before, with four analysts suggesting a "Strong Buy."
On May 2, Truist Securities analyst Jamie Cook reiterated a "Hold" rating on PACCAR but raised the price target to $121 after the company’s "impressive" Q1 performance. This new price target suggests a 12.1% upside potential from the current price levels.
The mean price target of $122.54 represents a premium of 13.5% to PCAR's current levels. The Street-high price target of $147 implies a potential upside of 36.2% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
