Bear of the Day: PACCAR (PCAR)

PACCAR (PCAR) is a Zacks Rank #5 (Strong Sell) that designs, manufactures, and distributes light, medium, and heavy-duty commercial trucks.The company has substantial manufacturing exposure to light/medium trucks and with the industry struggling the stock has been trending lower.Moreover, PCAR just reported an earnings miss and analysts are cutting their earnings estimates.About the CompanyHeadquartered in Bellevue, Washington, PACCAR operates through three principal segments: Truck, Parts, and Financial Services.The Truck segment designs, manufactures, and distributes trucks for the over-the-road and off-highway hauling of commercial and consumer goods. The Parts segment provides aftermarket support, while the Financial Services segment offers financing and leasing options for customers and dealers.PCAR is valued at $48 billion and has a Forward PE of 15. The stock holds Zacks Style Scores of “B” in Value and Growth, but “D” in Momentum.Q4 Earnings MissPACCAR reported mixed Q4 results, with earnings missing expectations by 7%, while revenue exceeded estimates.Truck deliveries declined to 43,900 from 51,100 a year earlier, but the company maintained a stable outlook for 2025, reaffirming its forecast for U.S. and Canadian Class 8 truck retail sales at 250,000 to 280,000 units.While PACCAR continues to dominate the North American vocational truck market with a 30.7% share through Kenworth and Peterbilt, the company acknowledged a slowdown in overall truckload demand.Dealer inventories remain healthy at 2.9 months, and the less-than-truckload market is showing relative strength. Management anticipates that infrastructure spending will sustain demand in key segments, but the outlook suggests 2025 could largely mirror 2024 with growth skewed toward the back half of the year.Earnings Estimates FallingSince reporting earnings PCAR has seen analysts cut estimates aggressively.Over the last 30 days, numbers for the current quarter have gone from $1.82 to $1.39. This is a drop of 23% and for the current quarter, numbers have dropped 21%, going from $1.92 to $1.51.Looking at the current year, estimates have also declined 21% over the last 60 days, down from $7.57 to $5.97.This trend looks to continue as next year’s estimates have been slashed 24%, falling from $9.16 to $6.96Technical TakeThe stock is hovering around 2025 lows, hanging just above the $90 level. The bulls recently reclaimed the 21-day moving average after the stock sold off on earnings. This is short term bullish, but due to the headwinds stated above, investors should take caution if the stock falls under the May low at $88.Resistance above is at the 50-day moving average at $95.30 and the 200-day MA at $100.70. Until the earnings story turns around, these levels should be seen as opportunities to take profits.If the stocks start to trend lower, the $70 level could come into okay. This was a resistance area back in 2023 and would likely find support.In SummaryPACCAR faces mounting pressure as industry headwinds, declining truck deliveries, and falling earnings estimates weigh on the stock. While the company’s strong market share and infrastructure-driven demand offer some long-term stability, the near-term outlook remains challenged. With analysts slashing estimates and the stock trading near key support levels, investors may want to stay cautious until there’s clear evidence of a turnaround in both fundamentals and sentiment.For those interested in the auto space, a better option might be Ford (F). The stock is a Zacks Rank #3 (HOLD) that just reported an earnings beat.     Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PACCAR Inc. (PCAR): Free Stock Analysis Report Ford Motor Company (F): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks