Paccar is a high-quality cyclical champion with a defensive parts engine, but at $122.73 its balanced scenarios indicate fair value rather than compelling near-term upside.
Overview
Paccar is a global premium commercial-truck manufacturer operating in more than 100 countries through three segments: Truck, Parts, and Financial Services. Truck represented 68% of fiscal 2025 revenue, while PACCAR Parts contributed approximately 20% of sales but a disproportionate share of high-margin earnings that cushions freight-cycle downturns. Peterbilt, Kenworth, and DAF benefit from premium brand equity, customization, high uptime, fuel efficiency, resale values, and a dealer ecosystem exceeding 2,000 locations. **The latest results show improving operating momentum:** Q2 2026 revenue was $7.55 billion, up 0.5% year over year and above the $7.03–$7.05 billion consensus range; net income was $752.0 million, diluted EPS was $1.43, and global deliveries rose to 38,700 units from 33,000 in Q1. Truck, Parts, and Other gross margin expanded to 14.4%, while Parts produced record $1.75 billion revenue at a 29.8% gross margin. Management expects approximately 42,000 Q3 deliveries, 14.5% gross margin, and 3%–5% full-year Parts growth. **The valuation is balanced:** shares trade at 25.78x trailing and 20.77x forward P/E, while the probability-weighted five-year target is $126.40 versus $122.73 currently. Catalysts include freight recovery, EPA27 pre-buy demand, and Parts distribution expansion.