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PACCAR Inc. (PCAR) Soars to 52-Week High, Time to Cash Out?
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Have you been paying attention to shares of Paccar (PCAR - Free Report) ? Shares have been on the move with the stock up 15.2% over the past month. The stock hit a new 52-week high of $104.97 in the previous session. Paccar has gained 17.7% since the start of the year compared to the -41.2% move for the Zacks Auto-Tires-Trucks sector and the -48% return for the Zacks Automotive - Domestic industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 25, 2022, Paccar reported EPS of $2.21 versus consensus estimate of $2.01 while it missed the consensus revenue estimate by 0.69%.
For the current fiscal year, Paccar is expected to post earnings of $8.15 per share on $26.55 billion in revenues. This represents a 53.2% change in EPS on a 21.6% change in revenues. For the next fiscal year, the company is expected to earn $8.36 per share on $27.67 billion in revenues. This represents a year-over-year change of 2.59% and 4.23%, respectively.
Valuation Metrics
Paccar may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Paccar has a Value Score of A. The stock's Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 12.7X current fiscal year EPS estimates, which is not in-line with the peer industry average of 14.2X. On a trailing cash flow basis, the stock currently trades at 13.1X versus its peer group's average of 13X. Additionally, the stock has a PEG ratio of 1.27. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Paccar currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Paccar fits the bill. Thus, it seems as though Paccar shares could have potential in the weeks and months to come.
How Does PCAR Stack Up to the Competition?
Shares of PCAR have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is HarleyDavidson, Inc. (HOG - Free Report) . HOG has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of F.
Earnings were strong last quarter. HarleyDavidson, Inc. beat our consensus estimate by 22.76%, and for the current fiscal year, HOG is expected to post earnings of $4.74 per share on revenue of $4.88 billion.
Shares of HarleyDavidson, Inc. have gained 32.5% over the past month, and currently trade at a forward P/E of 10.1X and a P/CF of 7.97X.
The Automotive - Domestic industry is in the top 50% of all the industries we have in our universe, so it looks like there are some nice tailwinds for PCAR and HOG, even beyond their own solid fundamental situation.
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PACCAR Inc. (PCAR) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of Paccar (PCAR - Free Report) ? Shares have been on the move with the stock up 15.2% over the past month. The stock hit a new 52-week high of $104.97 in the previous session. Paccar has gained 17.7% since the start of the year compared to the -41.2% move for the Zacks Auto-Tires-Trucks sector and the -48% return for the Zacks Automotive - Domestic industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 25, 2022, Paccar reported EPS of $2.21 versus consensus estimate of $2.01 while it missed the consensus revenue estimate by 0.69%.
For the current fiscal year, Paccar is expected to post earnings of $8.15 per share on $26.55 billion in revenues. This represents a 53.2% change in EPS on a 21.6% change in revenues. For the next fiscal year, the company is expected to earn $8.36 per share on $27.67 billion in revenues. This represents a year-over-year change of 2.59% and 4.23%, respectively.
Valuation Metrics
Paccar may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Paccar has a Value Score of A. The stock's Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 12.7X current fiscal year EPS estimates, which is not in-line with the peer industry average of 14.2X. On a trailing cash flow basis, the stock currently trades at 13.1X versus its peer group's average of 13X. Additionally, the stock has a PEG ratio of 1.27. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Paccar currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Paccar fits the bill. Thus, it seems as though Paccar shares could have potential in the weeks and months to come.
How Does PCAR Stack Up to the Competition?
Shares of PCAR have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is HarleyDavidson, Inc. (HOG - Free Report) . HOG has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of F.
Earnings were strong last quarter. HarleyDavidson, Inc. beat our consensus estimate by 22.76%, and for the current fiscal year, HOG is expected to post earnings of $4.74 per share on revenue of $4.88 billion.
Shares of HarleyDavidson, Inc. have gained 32.5% over the past month, and currently trade at a forward P/E of 10.1X and a P/CF of 7.97X.
The Automotive - Domestic industry is in the top 50% of all the industries we have in our universe, so it looks like there are some nice tailwinds for PCAR and HOG, even beyond their own solid fundamental situation.