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Valued at a market cap of $61.3 billion, PACCAR Inc (PCAR) designs, manufactures, and distributes light, medium, and heavy-duty commercial trucks. The Bellevue, Washington-based company also distributes aftermarket parts for trucks and related commercial vehicles.
This industrial company has underperformed the broader market over the past 52 weeks. Shares of PCAR have gained 30.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 31.4%. Moreover, on a YTD basis, the stock is up 6.4%, compared to SPX’s 7.6% rise.
Narrowing the focus, PACCAR has also lagged the State Street Industrial Select Sector SPDR ETF (XLI), which surged 32.5% over the past 52 weeks and 14% on a YTD basis.
On Apr. 28, shares of PCAR plunged 6% after the company reported mixed Q1 results. Its revenue declined 8.9% year-over-year to $6.8 billion, missing consensus estimates, primarily due to softer demand during the early part of the quarter and ongoing volatility in fuel and raw material costs. Despite the revenue shortfall, the company demonstrated operational resilience, as its EPS came in at $1.15, surpassing analyst expectations of $1.13 and improving from $0.96 reported in the prior-year quarter.
For the current fiscal year, ending in December, analysts expect PCAR’s EPS to increase 11.8% year over year to $5.60. The company’s earnings surprise history is promising. It met or topped the consensus estimates in each of the last four quarters.
Among the 19 analysts covering the stock, the consensus rating is a "Moderate Buy,” which is based on seven “Strong Buy” and 12 “Hold” ratings.
The configuration has remained consistent over the past three months.
On May 4, Argus Research maintained a “Buy” rating on PCAR and set a price target of $145, indicating a 24.5% potential upside from the current levels.
The mean price target of $129.41 suggests an 11.1% premium to its current price levels, while its Street-high price target of $150 implies a 28.7% potential upside.
