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Deutsche Bank Rated PACCAR as a ‘Hold’

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Price movement

PACCAR (PCAR) has a market cap of $20.3 billion. It fell by 0.61% to close at $57.49 per share on September 7, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -5.0%, -0.67%, and 22.9%, respectively, on the same day.

PCAR is trading 2.9% below its 20-day moving average, 2.1% above its 50-day moving average, and 9.2% above its 200-day moving average.

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Related ETF and peers

The First Trust NASDAQ-100 Ex-Technology Sector Index ETF (QQXT) invests 1.7% of its holdings in PACCAR. This ETF tracks an equal-weighted index of NASDAQ-100 stocks that excludes technology companies. The YTD price movement of QQXT was -1.8% on September 7.

The market caps of PACCAR’s competitors are as follows:

  • Cummins (CMI) — $20.2 billion
  • CNH Industrial (CNHI) — $9.8 billion
  • Penske Automotive Group (PAG) — $4.0 billion

PACCAR’s rating

Deutsche Bank has initiated the coverage of PACCAR with a “hold” rating and set the stock price target at $63.00 per share.

Performance of PACCAR in 2Q16

PACCAR reported 2Q16 Truck, Parts, and Other net sales and revenues of $4.1 billion, a fall of 14.6% compared to net sales and revenues of $4.8 billion in 2Q15. It reported a European commission charge of $109.6 million in 2Q16.

The revenue from Financial Services rose to $297.4 million in 2Q16, a rise of 1.2% compared to 2Q15. Its net income and EPS (earnings per share) rose to $481.3 million and $1.37, respectively, in 2Q16 compared to $447.2 million and $1.26, respectively, in 2Q15. It reported adjusted EPS of $1.06 in 2Q16.

PACCAR’s cash and marketable debt securities and inventories rose by 0.57% and 3.6%, respectively, in 2Q16 compared to 4Q15. Its debt-to-equity ratio rose to 2.2x in 2Q16 compared to 2.0x in 4Q15.

Next, we’ll discuss WABCO Holdings (WBC).

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