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Valued at a market cap of $55 billion, PACCAR Inc (PCAR) designs, manufactures and distributes light, medium, and heavy-duty commercial trucks. The Bellevue, Washington-based company also designs and manufactures diesel engines and other powertrain components for use in its own products and for sale to third-party manufacturers of trucks and buses. It is expected to announce its fiscal Q4 earnings results before the market opens on Tuesday, Jan. 28.
Ahead of this event, analysts project the farm and heavy construction machinery company to report a profit of $1.67 per share, down nearly 38.2% from $2.70 per share in the year-ago quarter. The company has surpassed Wall Street's earnings estimates in three of the last four quarters while missing on another occasion. Its earnings of $1.85 per share in the previous quarter outpaced the forecasted figure by a margin of almost 1.7%.
For fiscal 2024, analysts expect PCAR to report an EPS of $7.92, down 17.6% from $9.61 in fiscal 2023.
Shares of PCAR have gained 14.6% over the past 52 weeks, underperforming both the S&P 500 Index's ($SPX) 27.2% rise and the Industrial Select Sector SPDR Fund’s (XLI) nearly 18.9% return over the same time frame.
On Oct. 22, shares of PCAR plunged 4.4% after its Q3 earnings release, despite reporting better-than-expected Q3 earnings of $1.85 per share and adjusted revenues of $7.7 billion. However, a 20.9% annual decline in earnings due to a rise in costs and supplier-related limitations coupled with a 5.3% year-over-year fall in consolidated revenues to $8.2 billion might have dampened investor confidence and led to its downward price movement. The decline in the top-line figure can be primarily attributed to an 8.8% decrease in revenues from the Trucks segment, which is mainly fueled by ongoing softness in its Europe-used truck market.
Wall Street analysts are moderately optimistic about PACCAR’s stock, with a "Moderate Buy" rating overall. Among 15 analysts covering the stock, four recommend "Strong Buy," one suggests a “Moderate Buy,” nine indicate “Hold,” and one suggests a “Strong Sell” rating.
The average analyst price target for PCAR is $117.61, indicating a modest 9.7% potential upside from the current levels.
