- Price
- $110.82
- Fair value
- $135.00
- Discount
- 17.9%
- Uncertainty
- Medium
- LSEG rating
- 2.50
- Moat
- Narrow
- Next earnings
- 2026-10-28
- Next earnings is estimate
- Yes
- Company name
- PACCAR
- Sector
- Heavy trucks
- About
- PACCAR designs, makes and sells heavy and medium trucks under the Kenworth, Peterbilt and DAF brands. Kenworth and Peterbilt sell mainly in the United States, Canada, Mexico and Australia, and DAF sells mainly in Europe and South America. The company has three segments: Truck, Parts and Financial Services. PACCAR Parts sells aftermarket parts through more than 2,000 dealer locations and more than 350 TRP stores, and it earns more stable profits than the truck business. PACCAR Financial Services gives loans and leases to dealers and customers, and it includes the PacLease truck leasing business. Revenue was $28.44 billion in 2025, and net income was $2.38 billion. PACCAR makes its trucks for the United States, Canada and Mexico in factories in those countries.
- Thesis
- The market prices PACCAR for a weak North American truck market and for uncertain emissions rules. PACCAR delivered 39,800 trucks in the United States and Canada in the first half of 2026, down from 45,200 a year earlier, and Truck segment pre-tax profit for the half fell to $537 million from $674 million. Customers delayed truck purchases while the US Environmental Protection Agency (EPA) reviewed the 2027 NOx emissions rules and while freight rates were low. In July 2026, the EPA proposed to keep the 2027 NOx limits with changes to warranty and useful life rules. PACCAR says that this helps customers plan purchases for the second half of 2026 and 2027. For the gap to close, three things must be true. US and Canada Class 8 retail sales must reach at least the low end of the company's 2026 range of 230,000 to 270,000 trucks, and orders must stay strong into 2027 as freight rates improve. Truck margins must keep rising from higher prices and lower tariff costs, as in Q2 2026. Parts revenue must keep growing in line with the 2026 outlook of 3% to 5%. The Q3 2026 report, estimated for about October 28, 2026, shows deliveries and margins. The Q4 2026 report in late January 2027 gives the 2027 market outlook. If these checks pass, the gap can close over the next three to five quarters. The main reason it may not close is a weak freight market that delays the replacement of old trucks.
- Risks
- Truck sales are cyclical. US and Canada deliveries fell 12% in the first half of 2026. If freight rates stay low, customers can delay truck purchases into 2027 and later, and Truck segment profit falls.
The EPA's final 2027 NOx rule is not yet published. A final rule with higher costs, or more delays, can change when customers buy trucks and can increase PACCAR's engine and warranty costs.
Tariff policy can change. PACCAR builds most trucks locally, but tariffs on steel, aluminum and parts, or new rules under Section 232, can increase its costs.
PACCAR Financial Services had a provision for credit losses of $83.5 million in the first half of 2026, up from $47.5 million a year earlier. Lower used truck prices or more customer defaults can reduce its profit.
- Balance sheet
- Cash: $8.7B
Debt: $14.7B
Net debt: $6.0B
Undrawn credit line: $4.0B
PACCAR keeps two parts of its balance sheet apart. The Truck, Parts and Other businesses had cash and marketable securities of $8.67 billion at June 30, 2026, and no debt. All debt is in PACCAR Financial Services, which lends to dealers and customers. Its debt was $14.70 billion at June 30, 2026: $4.79 billion of commercial paper and bank loans, and $9.91 billion of term notes. Loans and leases of $22.27 billion back this debt, so it is not comparable to the debt of an industrial company, and the figures leave out EBITDA and interest cover for this reason. PACCAR has $4.00 billion of committed bank facilities: $1.50 billion expires in May 2027, $1.25 billion in June 2029 and $1.25 billion in June 2031. Nothing was borrowed under them in the first half of 2026. PACCAR says that its credit ratings are A+ and A1.
As of 2026-06-30.
- Checkpoints
- Oct 28, 2026 (estimate): Q3 2026 earnings: deliveries and truck margins. Pending. Watch: Higher deliveries than the 38,700 trucks of Q2 2026 and a higher Truck segment margin pass; lower deliveries or a lower margin fail.
Jan 2027 (estimate): Q4 2026 earnings: 2027 market outlook. Pending. Watch: A 2027 outlook for US and Canada Class 8 retail sales above the 2025 level of 232,800 trucks passes; an outlook below that level fails.
- Recent events
- 2026-07-28: PACCAR reported Q2 2026 results. Revenue was $7.55 billion and net income was $752 million, or $1.43 per diluted share, up 24% from Q1 2026. Deliveries were 38,700 trucks. PACCAR Parts had record revenue of $1.75 billion and pre-tax income of $417 million. Truck segment pre-tax income rose to $361 million from $309 million a year earlier, because of higher prices and lower tariff costs.
2026-07-28: PACCAR said that the EPA's clarification of the emissions rules on July 9, 2026 helps customers make purchase decisions for the second half of 2026 and 2027. The EPA's proposed rule keeps the 2027 NOx limits and changes the warranty and useful life requirements.
2026-04-28: PACCAR reported Q1 2026 results. Revenue was $6.77 billion and net income was $605 million. US and Canada deliveries were lower than a year earlier because of low retail demand.
2026-02-20: The US Supreme Court ruled that the tariffs imposed under the International Emergency Economic Powers Act were invalid. PACCAR says that the decision gave it tariff relief and the recovery of some amounts it had paid. The Section 232 truck tariffs that began in November 2025 are separate, and PACCAR says its local factories limit their cost.
2026-01-27: PACCAR reported 2025 results. Revenue was $28.44 billion and net income was $2.38 billion, or $4.51 per diluted share. Adjusted net income, which excludes a $264.5 million after-tax charge for civil claims in Europe, was $2.64 billion, or $5.01 per share. PACCAR declared dividends of $2.72 per share for 2025.