Stock of the Day

December 25, 2019

PACCAR (PCAR)

$104.46
-$2.00 (-1.9%)
Market Cap: $55.87B

About PACCAR

PACCAR Inc designs, manufactures, and distributes light, medium, and heavy-duty commercial trucks in the United States, Canada, Europe, Mexico, South America, Australia, and internationally. It operates through three segments: Truck, Parts, and Financial Services. The Truck segment designs, manufactures, and distributes trucks for the over-the-road and off-highway hauling of commercial and consumer goods. It sells its trucks through a network of independent dealers under the Kenworth, Peterbilt, and DAF nameplates. The Parts segment distributes aftermarket parts for trucks and related commercial vehicles. The Financial Services segment conducts full-service leasing operations under the PacLease trade name, as well as provides finance and leasing products and services to customers and dealers. This segment also offers equipment financing and administrative support services for its franchisees; retail loan and leasing services for small, medium, and large commercial trucking companies, as well as independent owners/operators and other businesses; and truck inventory financing services to independent dealers. In addition, this segment offers loans and leases directly to customers for the acquisition of trucks and related equipment. The company also manufactures and markets industrial winches under the Braden, Carco, and Gearmatic nameplates. PACCAR Inc was founded in 1905 and is headquartered in Bellevue, Washington.

PACCAR Bull Case

Here are some ways that investors could benefit from investing in PACCAR Inc:

  • PACCAR Inc has received multiple upgrades from analysts, indicating strong confidence in its future performance. For instance, Evercore ISI recently raised its rating to "outperform" and increased the price target significantly to $129.00.
  • The stock currently has a consensus rating of "Moderate Buy" from analysts, with an average target price of $121.95, suggesting potential for price appreciation.
  • Insider ownership stands at 2.02%, which can be a positive indicator as it suggests that those with the most knowledge about the company have a vested interest in its success.
  • PACCAR Inc's payout ratio is a modest 15.17%, indicating that the company retains a significant portion of its earnings for reinvestment, which can support growth and stability.
  • As of now, the stock price is around $120.00, which is close to the average target price set by analysts, suggesting it may be fairly valued with room for growth.

PACCAR Bear Case

Investors should be bearish about investing in PACCAR Inc for these reasons:

  • Despite the positive outlook from some analysts, there are also several hold ratings, indicating that not all analysts are convinced of the stock's potential for significant growth.
  • Jefferies Financial Group recently downgraded PACCAR from a "buy" to a "hold" rating, which may reflect concerns about the stock's short-term performance.
  • Market volatility can impact PACCAR Inc's stock price, especially given its exposure to the commercial truck market, which can be sensitive to economic fluctuations.
  • Some analysts have lowered their price targets, such as Morgan Stanley, which reduced its target from $135.00 to $126.00, indicating a more cautious outlook.
  • With a competitive landscape in the commercial truck industry, PACCAR Inc may face challenges in maintaining its market position and profitability against rivals.

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