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Bellevue, Washington-based PACCAR Inc (PCAR) designs, manufactures, and distributes light, medium, and heavy-duty commercial trucks for the over-the-road and off-highway hauling of commercial and consumer goods. With a market cap of $51.3 billion, PACCAR operates through Truck, Parts, and Financial Services segments. It is expected to release its Q3 earnings before the market opens on Tuesday, Oct. 22.
Ahead of the event, analysts expect PACCAR to report a profit of $1.82 per share, down 22.2% from $2.34 per share reported in the year-ago quarter. The company has surpassed Wall Street’s adjusted EPS projections thrice over the past four quarters while missing on one other occasion. Its adjusted EPS for the last reported quarter declined 8.6% year over year to $2.13 and missed the consensus estimates by a small margin.
For fiscal 2024, analysts expect PACCAR to report an adjusted EPS of $8.08, down 15.9% from $9.61 in fiscal 2023. However, in fiscal 2025, its EPS is expected to grow 2.1% year-over-year to $8.25.
PCAR has gained 3.7% on a YTD basis, lagging behind the S&P 500 Index’s ($SPX) 19.5% gains and the Industrial Select Sector SPDR Fund’s (XLI) 18.1% returns during the same time frame.
Shares of PACCAR plummeted 11% after the release of its Q2 earnings on Jul. 23. The company’s net revenue from the truck, parts, and other segments dropped 2.1% year over year to $8.3 billion, falling short of analysts’ expectations. Moreover, its net income experienced an even steeper decline of 8.1%, falling to $1.1 billion, due to a drop in European truck sales and lower profits from parts and financial services divisions.
PACCAR expects its truck industry heavy-duty retail sales in the U.S. and Canada to drop from 297,000 units in fiscal 2023 to 240,000 to 280,000 units in fiscal 2024, representing a notable decline in revenues for the current fiscal, unsettling investor confidence.
The consensus opinion on PCAR stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 15 analysts covering the stock, four recommend “Strong Buy,” one advises “Moderate Buy,” nine suggests “Hold,” and one advocates a “Strong Sell” rating.
The mean price target of $112.31 suggests a potential upside of 10.9% from current price levels.
On the date of publication, Aditya Sarawgi 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.
