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Paccar (PCAR)
NASDAQ:PCAR
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Paccar
(NASDAQ:PCAR)74Outperform
Positive Factors
Earnings
PCAR is one of the few OEMs in our sector likely to report a new peak EPS next year.
Market Recovery
The underlying Class 8 truck market is on the cusp of a recovery in North America, driven by replacement demand and upcoming regulatory changes.
Negative Factors
Regulatory Risks
Political risks and uncertainties related to EPA ‘27 remain, presenting a risk to current industry pre-buy estimates.
Paccar (PCAR) vs. S&P 500 (SPY)
Market Cap
$53.26B
Dividend Yield1.17%
Average Volume (3M)2.52M
Price to Earnings (P/E)12.8
Beta (1Y)0.97
Revenue Growth-4.29%
EPS Growth-9.76%
CountryUS
Employees32,400
SectorIndustrials
Sector Strength66
IndustryIndustrial Machinery
Share Statistics
EPS (TTM)7.90
Shares Outstanding524,802,600
10 Day Avg. Volume2,750,177
30 Day Avg. Volume2,519,424
Financial Highlights & Ratios
PEG Ratio0.85
Price to Book (P/B)N/A
Price to Sales (P/S)1.64
Price to Cash Flow (P/CF)9.50
P/FCF Ratio9.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$124.14Price Target Upside22.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Paccar Business Overview & Revenue Model
Company DescriptionFounded in 1905, Washington-based PACCAR, Inc. is a global technology company, which designs and manufactures light, medium, and heavy-duty commercial trucks. The company operates through three segments: Truck, Parts and Financial Services.
How the Company Makes MoneyPACCAR generates revenue primarily through the sale of trucks and related parts. Its key revenue streams include the manufacturing and sale of light-, medium-, and heavy-duty trucks, which are marketed under the Kenworth, Peterbilt, and DAF brands. Additionally, the company earns income from its aftermarket parts business, which supplies replacement parts and accessories for trucks. PACCAR also has a financial services division that provides financing and leasing options for its customers, contributing to the overall revenue. Significant partnerships with suppliers and dealers, as well as its global reach, help bolster its sales and market presence. The company's strong brand reputation and commitment to quality and innovation are critical factors in its earnings.
Paccar Financial Statement Overview
Summary
Paccar exhibits a strong financial position with consistent revenue and profit growth, improved capital structure, and robust cash flow generation. The elimination of debt enhances its financial flexibility, while high margins and returns indicate operational excellence. However, the decrease in gross and net margins in the latest year needs monitoring, as does the continued negative cash flow from investing activities.Income Statement
Paccar has demonstrated strong revenue growth, with a significant increase from $18.7 billion in 2020 to $31.6 billion in 2024. Gross profit margin improved to 17.4% in 2024 from 13.1% in 2020, indicating enhanced operational efficiency. The net profit margin of 13.2% in 2024 is robust, supported by consistent EBIT and EBITDA margins. Overall, the company shows strong profitability and growth trajectory, although margins slightly decreased in the latest period, which could be a point of concern if it continues.82
Very Positive
Balance Sheet
Paccar's balance sheet reflects a sound equity position, with stockholders' equity rising from $10.4 billion in 2020 to $17.5 billion in 2024. The company eliminated its total debt by 2024, significantly improving its debt-to-equity ratio, which was 1.38 in 2020. This increased financial stability, coupled with a return on equity of 23.8% in 2024, indicates effective use of shareholder funds. However, the equity ratio of 40.3% suggests room for improvement in asset financing.75
Positive
Cash Flow
Paccar's free cash flow increased from $1.3 billion in 2020 to approximately $2.9 billion in 2024, marking robust cash generation. The operating cash flow to net income ratio of 1.11 in 2024 suggests strong cash conversion efficiency. The company's free cash flow to net income ratio of 0.70 indicates healthy cash retention for growth and investment. Despite these positives, the cash flow from investing activities continues to be negative, indicating substantial reinvestment in the business.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 31.56B | 35.13B | 28.82B | 23.52B | 18.73B | Gross Profit |
| 5.49B | 7.14B | 4.75B | 3.29B | 2.45B | EBIT |
| 4.46B | 6.04B | 3.62B | 2.27B | 1.53B | EBITDA |
| 5.81B | 6.63B | 4.41B | 3.27B | 2.58B | Net Income Common Stockholders |
| 4.16B | 4.60B | 3.01B | 1.87B | 1.30B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 9.65B | 9.00B | 6.16B | 4.81B | 4.83B | Total Assets |
| 43.42B | 40.82B | 33.28B | 29.30B | 28.29B | Total Debt |
| 15.89B | 14.38B | 16.19B | 10.76B | 11.31B | Net Debt |
| -7.06B | 7.20B | 10.03B | 7.33B | 7.77B | Total Liabilities |
| 25.91B | 24.94B | 20.11B | 17.86B | 17.87B | Stockholders Equity |
| 17.51B | 15.88B | 13.17B | 11.44B | 10.42B |
| Cash Flow | Free Cash Flow | |||
| 2.90B | 2.93B | 1.64B | 553.90M | 1.35B | Operating Cash Flow |
| 4.64B | 4.19B | 3.03B | 2.19B | 2.99B | Investing Cash Flow |
| -4.49B | -2.87B | -2.03B | -1.36B | -1.88B | Financing Cash Flow |
| -123.10M | 1.10B | 304.90M | -882.90M | -1.81B |
Paccar Technical Analysis
Negative
101.48
Price Trends
106.74
Negative
107.11
Negative
102.12
Negative
Market Momentum
-0.86
Positive
36.38
Neutral
40.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PCAR, the sentiment is Negative. The current price of 101.48 is below the 20-day moving average (MA) of 105.82, below the 50-day MA of 106.74, and below the 200-day MA of 102.12, indicating a bearish trend. The MACD of -0.86 indicates Positive momentum. The RSI at 36.38 is Neutral, neither overbought nor oversold. The STOCH value of 40.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PCAR.
Paccar Risk Analysis
Paccar disclosed 17 risk factors in its most recent earnings report. Paccar reported the most risks in the “Macro & Political” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Paccar Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $6.15B | 9.21 | 16.14% | 1.94% | 11.36% | 13.78% | |
74 Outperform | $53.26B | 12.84 | 23.77% | 1.17% | -4.29% | -9.76% | |
74 Outperform | $44.99B | 7.10 | 9.53% | 1.01% | 9.08% | -15.25% | |
72 Outperform | $47.75B | 12.24 | 38.42% | 2.00% | 0.14% | 444.36% | |
71 Outperform | $36.15B | 6.24 | 13.11% | 7.99% | 5.00% | 35.92% | |
64 Neutral | $2.00B | ― | -3.92% | 2.82% | -2.57% | -248.28% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
PCAR
Paccar
101.48
-9.46
-8.53%
CMI
Cummins
347.32
79.70
29.78%
DAN
Dana Holding
13.78
1.81
15.12%
F
Ford Motor
9.12
-2.39
-20.76%
GM
General Motors
45.22
5.37
13.48%
OSK
Oshkosh
95.37
-14.02
-12.82%
Paccar Earnings Call Summary
Earnings Call Date: Jan 28, 2025 | % Change Since: -7.38% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Positive
PACCAR reported a strong financial performance with significant revenue and profit achievements, including record results in the Parts division. Market share growth and strategic investments indicate a positive outlook. However, challenges such as reduced truck deliveries, foreign exchange impacts, and geopolitical issues in Europe were noted.Highlights
Strong Annual Financial Performance
PACCAR achieved annual revenues of $33.7 billion, a net income of $4.2 billion, and an after-tax return on revenues of 12.4%, marking the second highest profit in the company's history.
Record Performance in Parts Division
PACCAR Parts set new records for revenues and profits, with annual revenues increasing by 4% to $6.7 billion and pre-tax profit rising to $1.71 billion. Parts gross margins were 30.9%.
Market Share Growth
Kenworth and Peterbilt's share in the US and Canadian Class 8 truck market increased to 30.7% from 29.5% in the prior year. In the medium-duty market, their share grew from 14.5% to 18%.
Strategic Investments and Innovations
PACCAR invested $796 million in capital projects and $453 million in research and development in 2024, including advancements in clean diesel and alternative fuel engines, battery electric powertrains, and driver assistance systems.
Positive Forecast for 2025
The US economy is projected to expand by more than 2% in 2025, with expectations of a strengthening market as the year progresses.
Lowlights
Reduced Truck Deliveries
PACCAR delivered 43,900 trucks in the fourth quarter and forecasts 40,000 deliveries in the first quarter of 2025, indicating a decrease in production.
Foreign Exchange Impact
The strong US dollar negatively impacted net income by approximately $20 million in the fourth quarter.
Geopolitical Challenges in Europe
The European market, particularly Central and Eastern Europe, faced challenges due to geopolitical factors, affecting market performance and DAF's strong presence in these regions.
Company Guidance
During PACCAR's Fourth Quarter 2024 Earnings Call, the company provided guidance on various key metrics for 2025. PACCAR achieved a strong financial performance in 2024, with annual revenues of $33.7 billion and net income of $4.2 billion, reflecting an after-tax return on revenues of 12.4%. The fourth quarter revenues were $7.9 billion, with a net income of $872 million. PACCAR Parts reported impressive fourth-quarter revenues of $1.6 billion and pre-tax profits of $428 million. The company declared dividends of $4.17 per share, a 53% payout of net income. For 2025, the U.S. and Canadian Class 8 truck market is expected to range between 250,000 and 280,000 vehicles, while European 16-tonne truck registrations are projected to be between 270,000 and 300,000. PACCAR anticipates delivering around 40,000 trucks in the first quarter of 2025, with worldwide Truck and Parts gross margins expected to be in the range of 15.5% to 16%. Capital investments for 2025 are planned between $700 million and $800 million, with R&D expenses projected to be $460 million to $500 million.Paccar Corporate Events
Executive/Board Changes
Paccar Announces Leadership Change in Financial Services
Neutral
Dec 11, 2024
Todd R. Hubbard, Vice President of Global Financial Services at Paccar, announced his retirement effective February 14, 2025, after 17 years with the company. The Board of Directors has appointed Craig R. Gryniewicz, who has been with Paccar Financial Corp. in various leadership roles, to succeed Hubbard, signaling a continuation of experienced leadership in Paccar’s financial services division.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.