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JPMorgan Upgrades PACCAR to ‘Neutral’

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Price movement

PACCAR (PCAR) has a market cap of $23.9 billion. It fell 0.57% to close at $67.68 per share on December 9, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 7.3%, 17.2%, and 45.3%, respectively, on the same day.

PCAR is trading 9.2% above its 20-day moving average, 15.3% above its 50-day moving average, and 20.7% 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 1.6% of its holdings in PACCAR. The YTD price movement of QQXT was -0.82% on December 9.

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

  • Cummins (CMI): $24.2 billion
  • CNH Industrial (CNHI): $12.4 billion
  • Penske Automotive Group (PAG): $4.8 billion

PCAR’s rating

On December 9, 2016, JPMorgan upgraded PACCAR’s rating to “neutral” from “underweight.” It also increased the stock’s price target to $60 per share from $50 per share.

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PACCAR declared dividends

PACCAR has declared an extra cash dividend of $0.60 per share on its common stock. The dividend will be paid on January 6, 2017, to shareholders of record at the close of business on December 16, 2016.

The company has declared a regular quarterly cash dividend of $0.24 per share on its common stock. The dividend will be paid on March 7, 2017, to shareholders of record at the close of business on February 14, 2017.

Performance of PACCAR in fiscal 3Q16

PACCAR reported 3Q16 truck, parts, and other net sales and revenues of $4.0 billion, a fall of 13.0% compared to $4.5 billion in 3Q15.

Revenue of financial services fell to $296.2 million in 3Q16, a fall of 1.6% compared to 3Q15. Its net income and EPS (earnings per share) fell to $346.2 million and $0.98, respectively, in 3Q16 compared to $431.2 million and $1.21, respectively, in 3Q15.

PACCAR’s cash and marketable debt securities fell 17.1%, and its inventories rose 3.5% between 3Q16 and 4Q15.

In the next and final part of this series, we’ll look at Polaris Industries (PII).

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