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PACCAR Inc - Stock Quote PCAR

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Morningstar's PACCAR Inc Stock Analysis

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Paccar’s First-Quarter Results Boosted by Strong Freight Activity; We Think Shares Are Undervalued

Dawit Woldemariam Equity Analyst

Analyst Note

| Dawit Woldemariam |

Narrow-moat-rated Paccar posted strong first-quarter results, thanks to strong global freight demand. We raised our fair value estimate to $103 from $101 previously to account for higher parts revenue and the time value of money since our last update. In the quarter, sales growth for Paccar’s parts business surged 20% year on year, largely due to higher truck utilization and elevated average fleet ages. Over the past year, supply headwinds have limited new truck production, which has forced many fleet owners to run existing trucks a lot longer than they would on average. This had led to greater parts consumption to keep trucks on the road to meet strong freight demand. As a result, we now expect Paccar’s parts business to grow by 11% year on year compared with our previous estimate of 10% year-on-year sales growth.

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PACCAR Inc's Company Profile

Business Description

Paccar is a leading manufacturer of medium- and heavy-duty trucks under the premium brands Kenworth and Peterbilt, which are primarily sold in the NAFTA region and Australia, and DAF trucks, which are sold in Europe and South America. Its trucks are sold through over 2,200 independent dealers globally. Paccar Financial Services provides retail and wholesale financing for customers and dealers, respectively. The company commands approximately 29% of the Class 8 market share in North America and 17% of the heavy-duty market share in Europe.

777-106th Avenue N.E.
Bellevue, WA, 98004
T +1 425 468-7400
Sector Industrials
Industry Farm & Heavy Construction Machinery
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type Cyclical
Employees 28,500

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