On Wednesday, Truist Securities adjusted the price target for PACCAR (NASDAQ:PCAR) shares, increasing it slightly to $113 from the previous $112, while maintaining a Hold rating on the stock. This adjustment came after PACCAR reported its fourth-quarter 2024 earnings per share (EPS) of $1.66, which fell short of the consensus by $0.03. PACCAR's stock ended the day down by 2%, in contrast to the S&P 500 which was up by 1%. The company's Q4 revenue also missed market expectations by 3%, and its EPS was 2% below the consensus. Foreign exchange rates negatively impacted net income by $20 million, or $0.04 per share, suggesting that without this headwind, the company would have surpassed EPS estimates.
The report also detailed pricing and cost pressures faced by PACCAR. The price of trucks decreased by 0.6%, while costs posed a challenge, being a headwind of 2.7%, consistent with the previous quarter. Parts pricing provided a bit of relief with a positive change of 1.8%, although costs in this segment also remained a headwind at 2.5%. Despite these challenges, InvestingPro analysis shows PACCAR maintains strong financial health with a "GREAT" overall score, supported by solid cash flows and moderate debt levels. Despite these challenges, InvestingPro analysis shows PACCAR maintains strong financial health with a "GREAT" overall score, supported by solid cash flows and moderate debt levels.
The report also detailed pricing and cost pressures faced by PACCAR. The price of trucks decreased by 0.6%, while costs posed a challenge, being a headwind of 2.7%, consistent with the previous quarter. Parts pricing provided a bit of relief with a positive change of 1.8%, although costs in this segment also remained a headwind at 2.5%.
Truist Securities' analyst Jamie Cook provided commentary on the adjustments made to their estimates, which led to the revised price target. Cook stated, "We tweaked our estimates and raised our PT to $113 from $112." The new target reflects a modest increase, indicating a cautious but slightly more optimistic view of the company's stock value following the Q4 report and the firm's detailed analysis of PACCAR's financial performance.
In other recent news, PACCAR Inc. faced adjustments in stock price targets by BofA Securities and Citi, following the release of its fourth-quarter earnings and revenue results. BofA Securities reduced its price target to $120 while maintaining a buy rating, whereas Citi analyst Kyle Menges revised the price target down to $112, maintaining a neutral rating. The adjustments were influenced by PACCAR's Q4 performance, which revealed a gross margin of 15.9% and earnings per share of $1.66, a 39% decline year-over-year.
Despite exceeding delivery projections and maintaining dividend payments for 55 consecutive years, PACCAR's earnings and revenue fell short of analyst expectations. The company's revenue came in approximately 5% below what analysts had forecasted, primarily due to lower than expected Truck margins and deliveries.
Recent developments include Citi's revised earnings per share estimates for 2025 to 2027, PACCAR's anticipation of a sequential decline in both Truck deliveries and margins for the first quarter, and its record annual revenue of $6.67 billion in 2024 from the Parts segment. Raymond (NSE:RYMD) James analyst Tim Thein maintained a Market Perform rating on PACCAR's stock, noting that the company's total gross margins reached 15.9%, which was slightly better than expected.
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