PACCAR (PCAR) PT Raised to $118 at Bernstein

Bernstein SocGen Group analyst Chad Dillard raised the price target on PACCAR (NASDAQ: PCAR) to $118.00 (from $107.00) while maintaining a Outperform rating.

The analyst commented: "PCAR reported 2Q earnings of $1.37, or +7% above consensus. Overall top-line and profitability came above expectations, and while the 3Q TP&O margin came in 60bps lighter than the street, mgmt. struck a confident tone that 3Q marked this cycle’s trough, and there are dynamics at play that could drive upside to their base case. That said, we see a greater likelihood of EPS estimates being revised higher (for ‘25 and ‘26) from here.

Guided 3Q TP&O margins of 13% in a steady state world, though there’s likely upside from several dynamics. 1) TL capacity continues to exit the market, which should be supportive of an improving spot rate (and eventually, order) environment, 2) OBBBA’s bonus depreciation is likely to drive incremental order demand in 2H (mgmt. sited customers reengaging on their ‘26 order book since becoming law) and offers a $300-400M cash tax benefit, 3) clarity on EPA’s emissions standards regulation which, if remains intact, will drive orders in 2H, and 4) tariffs - mgmt. quantified the current tariff impact at ~$75M, or ~120bps headwind to 3Q TP&O gross margin. If one or more of these materialize, there is room for estimates to be revised higher."

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