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CLSA Has Given PACCAR an ‘Outperform’ Rating

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Oct. 3 2016, Updated 2:04 p.m. ET

Price movement

PACCAR (PCAR) has a market cap of $20.6 billion. It rose 1.5% to close at $58.78 per share on September 30, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 1.5%, -1.8%, and 25.7%, respectively, on the same day.

PCAR is trading 2.2% above its 20-day moving average, 1.2% above its 50-day moving average, and 10.0% above its 200-day moving average.

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Related ETF and peers

The First Trust NASDAQ-100 Ex-Technology Sector ETF (QQXT) invests 1.7% of its holdings in PACCAR. The ETF tracks an equal-weighted index of NASDAQ-100 stocks, excluding technology companies. The YTD price movement of QQXT was -2.4% on September 30, 2016.

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

  • Cummins (CMI): $21.6 billion
  • CNH Industrial (CNHI): $9.9 billion
  • Penske Automotive Group (PAG): $4.1 billion

PACCAR’s rating

CLSA has initiated coverage of PACCAR with an “outperform” rating and set the stock’s price target at $65 per share.

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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 $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 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.

Quarterly dividend

PACCAR has declared a quarterly cash dividend of $0.24 per share on its common stock. The dividend will be paid on December 2, 2016, to shareholders of record at the close of business on November 18, 2016.

Next, let’s take a look at Polaris Industries (PII).

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