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PACCAR (PCAR) to Report Q2 Earnings: Is a Beat in Store?
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PACCAR Inc. (PCAR - Free Report) is scheduled to report second-quarter 2018 earnings results on Jul 24, before the market opens. In the last reported quarter, the company delivered a positive earnings surprise of 10.7%. Per its earnings trend, the company beat estimates in all the trailing four quarters, with an average beat of 6.9%.
The company’s long-term EPS growth for the next 3-5 years is pegged at 9.8%.
However, shares of PACCAR have underperformed the industry it belongs to in the last three months. During the period, the stock has declined 8.9% compared with the industry’s increase of 3%.
According to our quantitative model, chances of PACCAR beating the Zacks Consensus Estimate in the second quarter are high. This is because, it has the right combination of the two key ingredients, a positive Earnings ESP and a Zacks Rank #3 (Hold) or better, which is required to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: Earnings ESP for PACCAR is +1.31%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.45 and $1.43, respectively.
Zacks Rank: PACCAR currently carries a Zacks Rank #2 (Buy). This, when combined with a positive ESP, makes us reasonably confident of an earnings beat.
Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
What’s Driving Better-Than-Expected Earnings?
Driven by a robust economy and the strong freight demand, the company witnessed the doubling of Class 8 truck orders in the first quarter of 2018 compared with the prior-year quarter. This trend is likely to continue in the soon-to-be-released quarter. The company has raised its 2018 Class 8 truck industry retail sales estimates for the United States and Canada to 265,000-285,000 vehicles compared with its prior anticipation of 235,000-265,000 units. Moreover, the newly estimated range is much higher than 218,000 units of retail sales generated in 2017.
Furthermore, a strong balance sheet and outstanding long-term earnings are enabling PACCAR to invest in innovative products and new technologies. In 2018, the company aims to invest $300-$320 million under research and development expenses to develop new truck models and powertrains enabled with electric, hybrid and hydrogen fuel-cell technologies.
Further, PACCAR has been paying regular dividends to its shareholders since 1941. Recently, in May, PACCAR’s board approved 12% increase in the quarterly dividend on common stock to 27 cents.
Other Stocks to Consider
Here are a few other auto stocks worth considering, comprising the right combination of elements to deliver an earnings beat this time around:
LKQ Corporation (LKQ - Free Report) has an Earnings ESP of +2.43% and a Zacks Rank #1 (Strong Buy). The company will report second-quarter 2018 financial figures on Jul 26.
Visteon Corporation (VC - Free Report) has an Earnings ESP of +2.86% and a Zacks Rank #1. The company’s second-quarter 2018 financial results are scheduled to be released on Jul 26.
Magna International Inc. (MGA - Free Report) has an Earnings ESP of +1.22% and is a Zacks #2 Ranked player. The company’s second-quarter 2018 financial numbers are expected to be announced on Aug 8.
Today's Stocks From Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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PACCAR (PCAR) to Report Q2 Earnings: Is a Beat in Store?
PACCAR Inc. (PCAR - Free Report) is scheduled to report second-quarter 2018 earnings results on Jul 24, before the market opens. In the last reported quarter, the company delivered a positive earnings surprise of 10.7%. Per its earnings trend, the company beat estimates in all the trailing four quarters, with an average beat of 6.9%.
The company’s long-term EPS growth for the next 3-5 years is pegged at 9.8%.
However, shares of PACCAR have underperformed the industry it belongs to in the last three months. During the period, the stock has declined 8.9% compared with the industry’s increase of 3%.
PACCAR Inc. Price and EPS Surprise
PACCAR Inc. Price and EPS Surprise | PACCAR Inc. Quote
Is Positive Surprise Likely?
According to our quantitative model, chances of PACCAR beating the Zacks Consensus Estimate in the second quarter are high. This is because, it has the right combination of the two key ingredients, a positive Earnings ESP and a Zacks Rank #3 (Hold) or better, which is required to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: Earnings ESP for PACCAR is +1.31%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.45 and $1.43, respectively.
Zacks Rank: PACCAR currently carries a Zacks Rank #2 (Buy). This, when combined with a positive ESP, makes us reasonably confident of an earnings beat.
Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
What’s Driving Better-Than-Expected Earnings?
Driven by a robust economy and the strong freight demand, the company witnessed the doubling of Class 8 truck orders in the first quarter of 2018 compared with the prior-year quarter. This trend is likely to continue in the soon-to-be-released quarter. The company has raised its 2018 Class 8 truck industry retail sales estimates for the United States and Canada to 265,000-285,000 vehicles compared with its prior anticipation of 235,000-265,000 units. Moreover, the newly estimated range is much higher than 218,000 units of retail sales generated in 2017.
Furthermore, a strong balance sheet and outstanding long-term earnings are enabling PACCAR to invest in innovative products and new technologies. In 2018, the company aims to invest $300-$320 million under research and development expenses to develop new truck models and powertrains enabled with electric, hybrid and hydrogen fuel-cell technologies.
Further, PACCAR has been paying regular dividends to its shareholders since 1941. Recently, in May, PACCAR’s board approved 12% increase in the quarterly dividend on common stock to 27 cents.
Other Stocks to Consider
Here are a few other auto stocks worth considering, comprising the right combination of elements to deliver an earnings beat this time around:
LKQ Corporation (LKQ - Free Report) has an Earnings ESP of +2.43% and a Zacks Rank #1 (Strong Buy). The company will report second-quarter 2018 financial figures on Jul 26.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Visteon Corporation (VC - Free Report) has an Earnings ESP of +2.86% and a Zacks Rank #1. The company’s second-quarter 2018 financial results are scheduled to be released on Jul 26.
Magna International Inc. (MGA - Free Report) has an Earnings ESP of +1.22% and is a Zacks #2 Ranked player. The company’s second-quarter 2018 financial numbers are expected to be announced on Aug 8.
Today's Stocks From Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>