Update shared on 27 Nov 2025
Fair value Increased 0.14%PACCAR's analyst price target saw a modest increase to approximately $108. Analysts point to improving cost structures and a shift to competitive advantages from U.S.-based production, despite ongoing questions around margins and future demand.
Analyst Commentary
Recent Street research on PACCAR presents a mix of optimistic and cautious perspectives tied to current execution and future expectations. Analysts highlight both the company's evolving advantages and ongoing uncertainties that could shape future performance.
Bullish Takeaways- Bullish analysts cited a series of price target increases following strong Q3 results, reflecting growing confidence in cost management initiatives and operational execution.
- Section 232 tariff relief, starting November 1, is seen as delivering a significant cost advantage for PACCAR, particularly as the company manufactures over 90% of its trucks within the United States.
- Analysts believe PACCAR's domestic production footprint offers a competitive edge over peers with larger international manufacturing operations. This may create long-term market share opportunities.
- There is an expectation that by 2026, margins could see a substantial lift as the company benefits from the full annualized impact of tariff relief.
- Bearish analysts remain cautious as debate persists on whether margins have truly bottomed, particularly in light of a recent margin miss during Q3.
- The overall outlook for underlying truck demand remains uncertain, with some questioning the sustainability of current market trends through 2026.
- While tariff relief has alleviated some cost burdens, the net impact is still expected to be negative in the near term. This tempers enthusiasm regarding improved profitability.
- Valuation appears to be balanced at mid-cycle levels, leading some analysts to maintain neutral positions rather than move aggressively bullish on the stock.
What's in the News
- The Environmental Protection Agency plans to propose a new heavy-duty NOx rule in spring 2026, with implementation for Model Year 2027. This could lower the cost of new vehicles, impact regulatory requirements, and has already resulted in a share price increase for PACCAR. (Commercial Carrier Journal)
- North American Class 8 truck orders dropped 32% year-over-year in September, reaching 20,500 vehicles. This is the highest monthly total in eight months. Changes in demand continue to affect major industry players, including PACCAR. (Bloomberg)
- PACCAR completed the repurchase of 1,962,413 shares, representing 0.38% of shares outstanding, for a total of $128.23 million under its ongoing buyback program.
Valuation Changes
- Fair Value: Increased slightly from $107.13 to $107.28 per share.
- Discount Rate: Risen modestly from 8.94% to 9.07%.
- Revenue Growth: Remained unchanged at 1.93%.
- Net Profit Margin: Declined from 12.76% to 12.50%.
- Future P/E Ratio: Increased from 18.29x to 18.74x.
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.