Morgan Stanley maintains Equalweight rating on PACCAR stock

Investing.com - Morgan Stanley maintained its Equalweight rating and $90.00 price target on PACCAR (NASDAQ:PCAR) following the company’s third-quarter earnings results. The stock, currently trading at $99.73, appears overvalued according to InvestingPro’s comprehensive Fair Value analysis.

PACCAR reported adjusted earnings per share of $1.12 for the third quarter of 2025, beating Morgan Stanley’s estimate of $1.04 but falling short of the consensus expectation of $1.13. The company maintains strong fundamentals with a healthy 15.7% gross profit margin and has consistently paid dividends for 55 consecutive years, as revealed by InvestingPro data.

The truck manufacturer provided guidance for 230,000 to 270,000 U.S. and Canadian Class 8 truck retail sales units in 2026, significantly higher than ACT Research’s estimate of 191,000 units.

Morgan Stanley noted that the stock would likely face negative pressure as investors debate whether PACCAR’s margins are bottoming out, with the third-quarter margin miss raising additional concerns.

The research firm indicated that PACCAR’s optimistic 2026 industry outlook represents a positive signal for peers and companies like Cummins and Allison Transmission, though investors may view the guidance as overly optimistic in the near term.

In other recent news, PACCAR Inc. reported its third-quarter earnings, which fell short of analyst expectations. The company announced earnings per share of $1.12, missing the consensus estimate of $1.15. Despite this earnings miss, PACCAR’s revenue exceeded forecasts, coming in at $6.67 billion compared to the expected $6.18 billion. However, sales in the Total Truck, Parts & Other segment decreased by 20.7% to $6.107 billion, slightly below the anticipated $6.163 billion. Truist Securities maintained its Hold rating on PACCAR, with a price target of $97.00, following the earnings report. This rating reflects the profit miss and a 39% year-over-year decline in earnings per share. These developments highlight the mixed financial performance of PACCAR in the recent quarter.

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