Shares of global trucks manufacturing firm Paccar, Inc. (PCAR) lost 2.7% on Tuesday despite its excellent second-quarter 2021 results. The shares further fell 0.5% in after-hours trading and finally closed at $84.18.
The company primarily manufactures medium, light and heavy-duty trucks under DAF, Leyland Trucks, Peterbilt and Kenworth brands. (See Paccar stock chart on TipRanks)
Earnings per share (EPS) came in at $1.41, above $0.43 reported in the second quarter of 2020 and the Street’s estimate of $1.39. Quarterly net sales and financial services revenues surged 91% year-over-year to $5.84 billion, exceeding analysts’ expectations of $5.51 billion.
PACCAR Parts revenues increased to $1.21 billion, compared to the $823.7 million reported in the same period last year. Revenues of PACCAR Financial Services (PFS) rose to $456.3 million from $360.3 million.
The Senior Vice-President at Paccar, Mike Dozier, said, “Capital investments are estimated to be in a range of $550-$600 million, and research and development expenses to be in a range of $340-$360 million, this year.”
On July 15, Wolfe Research analyst Scott Group upgraded the rating on the stock to Hold from Sell. However, he did not provide a price target.
In a research note to investors, the analyst said, “The stock has lagged in part due to muted Class 8 truck orders and muted Class 8 builds amidst continued supply chain challenges. But truck orders are poised to rebound and Paccar’s valuation is now more attractive.”
Overall, the stock has a Moderate Buy consensus based on 2 Buys and 4 Holds. The average Paccar price target of $100.6 implies 18.9% upside potential to current levels. The company’s shares have lost 9.6% over the past six months.
According to TipRanks’ Smart Score rating system, Paccar scores a “Perfect 10,” suggesting that the stock is likely to outperform market averages.
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