Street Calls of the Week
Investing.com - Wolfe Research upgraded PACCAR (NASDAQ:PCAR) stock rating from Underperform to Peerperform on Wednesday. The machinery giant, with a market capitalization of $52.4 billion, has seen its shares trade at $99.85.
The research firm cited PACCAR’s valuation metrics in its decision, noting the stock is trading at 20 times its trough 2025 earnings per share estimate and 15 times its more normalized $6.80 EPS estimate. These figures compare to PACCAR’s 5-year and 10-year average forward P/E multiples of approximately 13x and 14x. According to InvestingPro analysis, the stock currently trades at a P/E of 17.05x and appears overvalued based on its Fair Value model.
Wolfe Research expects PACCAR’s gross margins to bottom this year, likely in the fourth quarter. The firm observed that PACCAR’s relative stock performance appears clearly correlated with its gross margin trajectory, suggesting limited additional downside for the stock. InvestingPro data shows current gross margins at 15.72%, with 10 additional key metrics and insights available to subscribers.
Despite the upgrade, Wolfe Research’s 2026 EPS estimate for PACCAR remains well below consensus, indicating limited upside potential. The firm suspects PACCAR could lag behind other trucking companies if the truckload market begins tightening.
Wolfe Research believes PACCAR is now relatively better positioned versus other truck original equipment manufacturers given Section 232 tariffs and respective rebates, contributing to the rating change.
In other recent news, PACCAR Inc reported its Q3 2025 earnings with a mixed financial outcome. The company achieved revenues of $6.7 billion, exceeding forecast expectations of $6.18 billion, resulting in a 7.93% surprise. However, its earnings per share (EPS) fell short, posting $1.12 against the anticipated $1.16, a miss of 3.45%. Despite these results, PACCAR’s stock showed some volatility, although specific price movements are not detailed here. These developments are part of the company’s ongoing financial performance updates. Investors and analysts may find the revenue beat noteworthy, even as the EPS miss suggests areas for potential improvement. Such financial results can influence investor sentiment and future analyst evaluations.
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