On Tuesday, before 11:55 a.m. Eastern Time, the stocks of Paccar (PCAR), a significant American truck manufacturing company, increased by 4.8%, due to surpassing expectations in sales and matching earnings as per their Q2 report.
Financial experts predicted that Paccar would make $1.37 per share in Q2, and they were spot on with their projection. Despite expectations of $7 billion in sales, Paccar surpassed this by generating revenue of $7.5 billion – a positive sign for truck demand and potentially beneficial for transportation stocks too.
Paccar Q2 earnings
While Paccar exceeded predictions with $7.5 billion in sales, it’s important to note that this figure represents a 15% decrease compared to the $8.8 billion they made last year. The drop in profitability was more significant, decreasing by 36% when compared to the same period last year.
In simpler terms, Kevin Baney, Paccar’s Executive Vice President, stated that even though the exact figures might suggest otherwise, Kenworth and Peterbilt, two of their brands, are maintaining their position well in the U.S. and Canadian market, collectively holding a 30.4% share during the first half of this year. Moreover, these brands have introduced electric trucks for purchase by regional haulers, with the Kenworth T680E and Peterbilt 579EV capable of traveling up to 250 miles on a single charge.
Is Paccar stock a buy?
With a multiple of approximately 15.7 times its trailing earnings (slightly higher when accounting for debt), and offering a sizable 4.6% dividend return, Paccar’s stock doesn’t appear overpriced. However, the decreases in both sales and profits might make an investor hesitate.
The company’s free cash flow is substantial, approximately $2.9 billion, which represents nearly 94% of its reported net income. While analysts anticipate an 8% long-term growth rate in earnings for the stock, this still makes it somewhat expensive. If the share price were to decrease by around 20%, I would consider purchasing Paccar stock.
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2025-07-22 19:42