Sponsored Links 
U.S. Market Weighs on Paccar
Paccar, Inc. (PCAR - Analyst Report) is benefiting from rising prices and increasing market share, along with strong growth in Mexico and Australia. However, a strong Class 8 market downturn in the U.S. leads us to rate the stock a Hold, with a target of $55.00. This is 16.2x our 2008 earnings estimate.
The company’s base business in the U.S. and Europe is improving, aside from cyclical effects. Average transaction prices are rising about 5% in both North America and Europe due to the increased emission content.
Paccar continues to increase its market share in the U.S. and Canadian Class 8 retail sales. Truck demand in Europe and international markets is strong. On the other hand, Paccar has leading share in both Mexico and Australia, both of which are seeing a surge in demand ahead of 2008 emissions deadlines.
Over the past three years, Paccar also invested $978 million to repurchase 27.4 million shares and paid over $1.7 billion in dividends to the shareholders for a total return of over $2.7 billion. Recently, the company paid an extra cash dividend of $1 per share. Currently, the stock is valued at 15.7x our 2008 earnings of $3.40.
However, a decline in the company’s commercial truck unit sales, an increase in residual value risk due to lower used-truck pricing, and increased funding costs are factors which may negatively affect the company’s financial services operations.
Read the full analyst report on PCAR
 |
 |
 Share |
 RSS |
 Rate Pos |
 Rate Neg |
 Comment |
|
|
||||||
Loading Stories...Related Content
- Free Four Zacks #1 Rank "Strong Buy" Stocks
- Free Timely Market Commentary
- Free Wealth Management Tips
- Free Profitable Strategy Screens
- Free Bull and Bear Stocks of the Day
Loading Stories...Most Popular on Zacks.com
2.88 %
More Zacks Resources
More Zacks Links
| Market Summary | Feb 09, 2010 23:08 pm ET |
[CLICK TO CLOSE X]