Paccar Inc
PCAR
$118.32
+0.57%
Paccar Inc is a leading manufacturer of medium- and heavy-duty trucks under premium brands like Kenworth, Peterbilt, and DAF. It is a dominant player in the global trucking industry, leveraging a vast independent dealer network and a growing parts business to solidify its market position.…
PCAR
Paccar Inc
$118.32
Investment Opinion: Should I buy PCAR Today?
Based on a synthesis of the data, the objective assessment for PCAR is a Hold. The company's impeccable balance sheet, market leadership, and attractive forward P/E provide a solid foundation. However, the clear deterioration in recent quarterly fundamentals, the stock's high trailing valuation relative to this decline, and the inherent cyclical risks suggest the current price already reflects much of the positive outlook. Investors may find better entry points if the cyclical downturn deepens, making it prudent to wait for more concrete signs of a fundamental rebound before establishing new positions.
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PCAR 12-Month Price Forecast
The analysis yields a neutral stance due to the tension between PCAR's defensive financial strength and its offensive exposure to a cyclical downturn. The confidence is medium as the near-term direction hinges heavily on macroeconomic factors outside the company's control.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Paccar Inc's 12-month outlook, with a consensus price target around $153.82 and implied upside of +30.0% versus the current price.
Average Target
$153.82
2 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
2
covering this stock
Price Range
$95 - $154
Analyst target range
Wall Street analyst coverage for PCAR is limited, with only two analysts providing estimates. The consensus estimated EPS for the period is $7.67, with a range from $7.27 to $8.12. Estimated average revenue is $32.43 billion. Recent institutional ratings from firms like Evercore ISI (Outperform), JP Morgan (Overweight), and Morgan Stanley (Equal Weight) indicate a generally positive to neutral stance, but the low number of analysts suggests coverage is not extensive.
Bulls vs Bears: PCAR Investment Factors
PCAR is a financially fortress-like company with a leading market position, but it faces significant headwinds from a cyclical downturn in its core business. The stock's recent outperformance and strong balance sheet are positive, yet declining fundamentals and a high trailing valuation create near-term uncertainty.
Bullish
- Strong Market Position: Dominant 30% Class 8 market share in North America with premium brands.
- Robust Financial Health: Zero debt-to-equity ratio and strong current ratio of 1.70.
- Healthy Cash Flow: Operating cash flow of $1.14B in Q4 supports dividends and growth.
- Attractive Forward Valuation: Forward P/E of 16.99 suggests earnings growth expectation.
Bearish
- Revenue and Profit Decline: Q4 revenue down 13.74% YoY; net margin fell from 11.03% to 8.16%.
- Cyclical Industry Risk: Heavy truck demand is sensitive to economic cycles and freight volumes.
- High Trailing P/E: Trailing P/E of 24.25 is elevated for a cyclical industrial company.
- Recent Price Pullback: Stock down 8.40% over the past month, underperforming the market.
PCAR Technical Analysis
The stock has demonstrated strong overall performance over the past six months, with a gain of 16.57%, significantly outperforming the S&P 500, which declined 2.82% over the same period. The price has risen from approximately $99 in early October 2025 to $115.50 as of March 31, 2026. In the short term, the stock has experienced a pullback, declining 8.40% over the past month, which underperformed the S&P 500's 5.25% decline. However, it has gained 5.47% over the last three months, strongly outperforming the market's 4.63% loss. The current price of $115.50 sits between the 52-week high of $131.88 and low of $84.65, positioning it in the upper half of its yearly range, approximately 12.4% below the peak.
Beta
1.05
1.05x market volatility
Max Drawdown
-21.9%
Largest decline past year
52-Week Range
$85-$132
Price range past year
Annual Return
+19.4%
Cumulative gain past year
| Period | PCAR Return | S&P 500 |
|---|---|---|
| 1m | -2.4% | -3.6% |
| 3m | +6.1% | -4.0% |
| 6m | +20.6% | -2.0% |
| 1y | +19.4% | +16.2% |
| ytd | +6.1% | -3.8% |
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PCAR Fundamental Analysis
Revenue and profitability have shown a declining trend year-over-year, with Q4 2025 revenue of $6.82 billion representing a 13.74% decrease from Q4 2024. The net income margin for the latest quarter was 8.16%, down from 11.03% a year prior, indicating pressure on profitability. The company maintains a strong financial position with a current ratio of 1.70 and a reported debt-to-equity ratio of 0, suggesting a very conservative capital structure with minimal leverage. Operating cash flow remains robust at $1.14 billion for Q4 2025, supporting healthy free cash flow generation. Operational efficiency metrics show a return on equity (ROE) of 12.33% and a return on assets (ROA) of 4.37%, indicating decent but not exceptional returns on shareholder equity and company assets.
Quarterly Revenue
$6.8B
2025-12
Revenue YoY Growth
-0.13%
YoY Comparison
Gross Margin
+0.13%
Latest Quarter
Free Cash Flow
$3.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is PCAR Overvalued?
Given the company's positive net income, the primary valuation metric is the trailing P/E ratio, which stands at 24.25. The forward P/E is lower at 16.99, suggesting analysts expect earnings growth. The price-to-sales (P/S) ratio is 2.03, and the enterprise value to EBITDA (EV/EBITDA) is 11.52. No industry average comparison data was provided in the valuation inputs, so a peer comparison cannot be made. The valuation appears to be at a moderate level based on traditional earnings multiples, with the forward P/E indicating a more attractive earnings outlook.
PE
24.2x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 9x~26x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
11.5x
Enterprise Value Multiple
Investment Risk Disclosure
The primary risk for PCAR is its exposure to the highly cyclical heavy-duty truck market. Recent quarterly financials show a clear downtrend, with revenue and profitability declining year-over-year. An economic slowdown or recession could further depress freight demand and truck orders, pressuring the top and bottom lines. The company's valuation, with a trailing P/E of 24.25, appears to be pricing in a robust recovery; if the downturn is prolonged, the stock could see multiple contractions. While the company's zero-debt balance sheet and strong cash flow mitigate financial risk, operational risks related to supply chains, input costs, and competitive pressures in a slowing market remain pertinent. The low number of covering analysts (2) also adds an information asymmetry risk for investors.
FAQ
The key risks are cyclical demand weakness, evident in declining revenue and margins. The heavy truck industry is sensitive to economic health. Valuation risk exists with a high trailing P/E. There is also execution risk in navigating the downturn and competitive risk, though PCAR's strong market share mitigates this. Its strong balance sheet significantly reduces financial risk.
The 12-month outlook presents a base case target range of $110-$125, assuming earnings meet the analyst consensus of $7.67. A bull case (25% probability) could see a retest of the 52-week high near $132+, while a bear case (15% probability) could see a retreat toward the 52-week low of $84.65 if the economic slowdown worsens.
PCAR's valuation sends mixed signals. The trailing P/E of 24.25 appears elevated given the recent profit decline. However, the forward P/E of 16.99 and P/S ratio of 2.03 suggest the market expects earnings recovery, pricing in a more normalized scenario. It is not clearly undervalued; it appears fairly valued to slightly rich based on current, weakening fundamentals.
Based on current data, PCAR is assessed as a Hold, not a strong Buy. The company's zero debt and market leadership are positives, but its revenue and profits are declining (Q4 revenue down 13.7% YoY), and its trailing P/E of 24.25 is high for this phase of the cycle. The more attractive forward P/E of 16.99 suggests better value may emerge if earnings stabilize.
PCAR is more suitable for long-term, patient investors who can withstand cyclical volatility. Its strong brand and financials make it a durable long-term holding. Short-term trading is challenged by the current fundamental downtrend and economic uncertainty. The high dividend payout ratio (95%) also indicates an income component for long-term holders.