Evaluating PACCAR (PCAR) Valuation Following Its Robust Multi-Year Stock Price Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 21 2025
0mins
Source: Yahoo Finance
PACCAR's Stock Performance: PACCAR's stock has increased approximately 15% in the last three months and nearly doubled over the past three years, indicating strong investor confidence in its earnings potential and valuation.
Future Growth Catalysts: Anticipated demand for new trucks due to upcoming emissions standards is expected to drive revenue and earnings growth, although macroeconomic uncertainties and elevated tariffs pose risks to margins.
Valuation Insights: Currently trading at a price-to-earnings ratio of 21.8x, PACCAR appears cheaper compared to the US Machinery industry average, suggesting the market may be underestimating its long-term value.
Investment Considerations: The article emphasizes the importance of understanding both the growth opportunities and risks associated with PACCAR, while also encouraging exploration of other undervalued stocks and sectors.
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Analyst Views on PCAR
Wall Street analysts forecast PCAR stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for PCAR is 109.25 USD with a low forecast of 90.00 USD and a high forecast of 133.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
10 Analyst Rating
3 Buy
7 Hold
0 Sell
Moderate Buy
Current: 123.320
Low
90.00
Averages
109.25
High
133.00
Current: 123.320
Low
90.00
Averages
109.25
High
133.00
About PCAR
PACCAR Inc is a multinational company operating in three principal industry segments. The Truck segment includes the design, manufacture and distribution of light-, medium- and heavy-duty commercial trucks. Heavy-duty trucks have a gross vehicle weight (GVW) of over 33,000 lbs (Class 8) in North America and over 16 metric tons in Europe and South America. Medium-duty trucks have a GVW ranging from 19,500 to 33,000 lbs (Class 6 to 7) in North America, and in Europe, light- and medium-duty trucks range between 6 and 16 metric tons. Trucks are configured with the engine in front of cab (conventional) or cab-over-engine (COE). The Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles. The Financial Services segment includes finance and leasing products and services provided to customers and dealers. Its finance and leasing activities are principally related to the Company’s products and associated equipment.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
PACCAR Reports Record Q4 Earnings and Optimistic 2026 Outlook
- Revenue and Profit Growth: PACCAR's Q4 revenues reached $6.8 billion with a net income of $557 million, while annual revenues hit $28.4 billion and adjusted net income was $2.64 billion, marking the fourth highest profit year in the company's history and demonstrating robust financial performance.
- Parts and Financial Services Records: PACCAR Parts achieved annual revenues of $6.9 billion, up 3%, while PACCAR Financial Services reported record annual revenues of $2.2 billion with an 11% increase in pretax income to $485 million, indicating strong performance across multiple business segments.
- Optimistic Market Outlook: The U.S. and Canadian Class 8 truck market is projected to range between 230,000 to 270,000 vehicles in 2026, driven by economic growth, regulatory clarity, and improving freight conditions, suggesting a potential boost in customer demand.
- Capital and R&D Investments: PACCAR's capital project investments totaled $728 million, with R&D investments at $446 million, reflecting the company's ongoing commitment to future growth, particularly as parts sales are expected to grow by 4% to 8% this year.
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Paccar Reports Earnings Beat for 2025 Yet Stock Declines
- Earnings Beat: Paccar reported Q4 2025 earnings of $1.06 per share, surpassing analyst expectations of $1.05, with sales reaching $6.8 billion; however, the stock fell 1.9%, indicating market disappointment despite the earnings beat.
- Sales Decline: The company's sales dropped 14% year-over-year, with full-year 2025 sales down 16% to $28.4 billion, highlighting significant market challenges and weak demand affecting overall performance.
- Stable Cash Flow: Free cash flow remained steady at $3.7 billion, significantly exceeding the reported net income of $2.4 billion, indicating strong cash management, yet failing to boost investor confidence.
- Bleak Market Outlook: With a market capitalization of $62.8 billion, Paccar's stock trades at a high P/E ratio of 26 times, lacking growth guidance and with analysts forecasting only 5% long-term earnings growth, leading to cautious investor sentiment.
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