S&P 500 falls as ongoing government shutdown, trade jitters weigh
Investing.com - Bernstein SocGen Group has maintained its Outperform rating and $118.00 price target on PACCAR (NASDAQ:PCAR), representing a 27% upside from the current price of $93.23, despite anticipated headwinds in the truck sector. According to InvestingPro data, PACCAR maintains a "GOOD" overall financial health score and has consistently paid dividends for 55 consecutive years.
The research firm expects truck deliveries to miss market expectations by 9% in the third quarter and 8% in the fourth quarter of 2025, with potential margin pressure from tariff costs that cannot be passed on to customers.
Bernstein projects PACCAR’s Truck and Parts Operations gross margins will likely reach 12% in Q3 and 13% in Q4, falling below consensus estimates by 100 and 60 basis points respectively, with earnings per share potentially coming in 5% and 2% below market expectations.
The firm anticipates PACCAR management will introduce a disappointing 2026 industry forecast calling for a 10% decline, contrasting with the street’s expectation of 10% growth, marking production levels 20% below replacement rates and the lowest point outside a recession.
Despite these near-term challenges, Bernstein views the upcoming third-quarter report as a "clearing event" and identifies potential upside from Section 232 commentary, which could provide a 60-cent earnings tailwind for PACCAR in 2026 and boost gross margins.
In other recent news, PACCAR Inc. reported second-quarter earnings of $1.37 per share, exceeding consensus estimates by 7%, with both top-line performance and profitability surpassing expectations. Additionally, PACCAR’s Board of Directors declared a regular quarterly cash dividend of $0.33 per share, payable on December 3, 2025, to stockholders of record as of November 12, 2025. In a separate development, PACCAR collaborated with Dragonfly Energy Holdings Corp. on a whitepaper exploring lithium-powered solutions aimed at reducing idling and fuel costs in the trucking industry.
The collaboration evaluates lithium-powered idle-reduction solutions compared to traditional diesel-powered and AGM-based alternatives, using real-world fleet trial data. In terms of market activity, North American Class 8 truck orders reached 20,500 vehicles in September, marking the highest level in eight months. Analyst firms have also adjusted their outlooks on PACCAR, with Wolfe Research raising its price target to $86.00 due to better-than-expected gross margins, while Bernstein increased its target to $118.00, citing upside potential.
These developments highlight recent progress and strategic moves within PACCAR, reflecting both operational achievements and market dynamics.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.