PCAR
PACCAR Inc$124.66
Unclear
Target $117.18
Report: Mar 08, 2026Industrials • Agricultural - Machinery • Cyclical OperatorSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$124.66-6.0%
Rec: UnclearConviction: Medium
Entry Target
$90.14
(28% below current)
Fair Value
$117.18
(6% below current)
Stop Loss
$80.00
(36% below current)
Position Size
Starter
Time Horizon
Transitional (12-24 Months)
Key Metrics
Live Snapshot
Market Data
52 Week High$131.88
52 Week Low$84.65
Avg. 3 Month Volume3.19M
Efficiency
LTM Gross Margin20.1%
LTM EBITDA Margin14.8%
LTM EBIT Margin13.4%
LTM Operating Margin13.2%
LTM ROA5.4%
LTM ROE12.6%
LTM ROIC7.9%
LTM ROCE9.9%
Capital Structure
Market Cap (MM)$60.7B
Enterprise Value (MM)$70.1B
Shares Outstanding525.90M
Total Debt (MM)$15.64B
Cash & Equivalents (MM)$6.31B
LTM Net Debt (MM)$9.33B
LTM Net Debt/EBITDA2.2x
Growth
TTM Rev. Growth-15.5%
Last 3-Yr Rev. CAGR-0.4%
Last 3-Yr EBITDA CAGR-4.7%
Last 3-Yr EPS CAGR-7.8%
Valuation
Street Target Price$107.57
LTM EV/Revenue2.5x
LTM EV/Gross Profit12.3x
LTM EV/EBIT18.4x
LTM EV/EBITDA16.7x
LTM P/E25.6x
LTM EV/FCF23.1x
LTM P/FCF20.1x
LTM P/TB1.4x
LTM P/B3.2x
Dividend Yield2.4%
Payout Ratio60.2%
Executive SummarySituation: Current price is $124.66 versus fair value $117.18 (-6.0% expected return), and valuation confidence is stable. Debate: Bull case depends on EPA 2027 Pre-Buy Cycle Inflection Fleets are expected to accelerate purchases of current-generation diesel trucks to avoid the higher costs and technical uncertainty of 2027-compliant vehicles. Bear case centers on Lower-for-Longer Cyclical Downturn A structural recession in the freight market could delay the EPA 2027 pre-buy, leading to sustained volume weakness and further margin erosion. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
The EPA 2027 pre-buy cycle will drive a massive volume surge in 2026, while Section 232 tariff rebates (expected to lift gross margins to 12.5-13% in Q1 2026) restore pricing power. The high-margin Parts segment continues to grow at 4-8% annually, providing a resilient earnings floor.
Bear Case
Structural margin erosion is permanent as PACCAR's operating margins lag peers by over 600 basis points. Furthermore, the 15.5% revenue collapse and 43% earnings decline in 2025 suggest a deeper cyclical trough than the market currently anticipates, exacerbated by high dealer inventory levels of 3.2 months industry-wide.
Key Catalysts
Mid-Term (6-18 months)Impact: High
EPA 2027 Pre-Buy Cycle Inflection Fleets are expected to accelerate purchases of current-generation diesel trucks to avoid the higher costs...
Near-Term (0-6 months)Impact: Moderate
Section 232 Tariff Rebate Realization The phase-in of tariff rebates for U.S.-manufactured components is expected to provide a direct tailwi...
Long-Term (18+ months)Impact: Moderate
PACCAR is at a critical juncture as it transitions from a 15.5% revenue contraction in 2025 to an anticipated regulatory-driven upcycle in 2...
Primary Risks
Concern: Medium
Lower-for-Longer Cyclical Downturn A structural recession in the freight market could delay the EPA 2027 pre-buy, leading to sustained volum...
Concern: High
Tariff Cost Absorption If competitors do not raise prices to reflect tariff costs, PACCAR may be forced to absorb these costs to maintain it...
Concern: Medium
Stewardship is strong, anchored by a board with deep cyclical expertise. Audit Chair Pierre Breber (former Chevron CFO) and Lead Director Ma...
Recent Activity
2025-07-22SEC Filing (8-K)
+6.10%PACCAR reports good Q2 2025 revenues and profits despite challenging market conditions.
2025-04-03Market Movement
-6.79%Market/Sector Move -6.79%
2024-07-23SEC Filing (8-K)
-10.97%PACCAR achieves excellent Q2 2024 revenues and profits with strong global truck demand.
2024-04-30SEC Filing (8-K)
-6.63%PACCAR reports excellent Q1 2024 financial performance with record revenues and net income.
2023-01-24SEC Filing (8-K)
+8.63%PACCAR reports record annual 2022 revenues and net income driven by strong global growth.
Valuation Table
9.8/10Decision Grade
Scenario Range
$103
Bear
$120
Base
$156
Bull
$125