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Valued at a market cap of $48.9 billion, Bellevue, Washington-based PACCAR Inc (PCAR) is a global leader in designing and manufacturing premium trucks under the Kenworth, Peterbilt, and DAF brands.
Companies worth $10 billion or more are generally considered "large-cap" stocks, and PACCAR exemplifies this category, signifying its substantial size, stability, and influence in the commercial vehicle industry. The company is a dominant force in the commercial vehicle industry, with a strong commitment to advanced technology and customer service, reinforcing its position as a key player in the global transportation sector.
Shares of PCAR have dropped 24.3% from their 52-week high of $125.50, reached on Mar. 28. Over the past three months, PCAR's shares have declined 11.8%, underperforming the broader Dow Jones Industrial Average Index’s ($DOWI) 5.2% return over the same time frame.
In the longer term, PCAR is down 2.7% on a YTD basis but has climbed 12.4% over the past 52 weeks. In comparison, the DOWI is up 8.3% in 2024 and 18.1% over the past year.
To confirm the recent bearish price trend, PCAR has been trading below its 50-day and 200-day moving average since late July.
After reporting its Q2 earnings results on July 23, PACCAR shares dropped 10%. The company’s EPS of $2.13 did not meet Wall Street expectations of $2.15. Revenue totaled $8.77 billion, a 1.2% decline year over year, while adjusted revenue of $8.26 billion also fell short of the anticipated $8.31 billion.
PACCAR did not provide earnings guidance for Q3 or the rest of the year but indicated that the Class 8 truck market in the U.S. and Canada is expected to shrink from approximately 305,000 trucks in 2023 to around 260,000 trucks in 2024, reflecting a 15% decline.
In the industrial sector, PCAR faces significant competition, notably from AB Volvo (VLVLY), which has delivered a return of 24.9% over the past year, outperforming both PCAR and DOWI. However, VLVLY has underperformed in 2024, declining 5.3% on a YTD basis.
Analysts are optimistic about PCAR's prospects despite its recent underperformance. The stock has a consensus rating of "Moderate Buy" from 15 analysts in coverage. The mean price target of $112.31 reflects an 18.3% premium over current levels.
On the date of publication, Kritika Sarmah 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.
