Healthy Upside Potential: PACCAR Inc (PCAR)

PACCAR Inc (NASDAQ: PCAR) stock fell -0.66% on Friday to $84.90 against a previous-day closing price of $85.46. With 1.23 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.72 million shares. During the session, the Farm & Heavy Construction Machinery company that operates in wider Industrials sector, reached to the highest price of $85.89 whereas the lowest price it dropped to was $84.48. The 52-week range on PCAR shows that it touched its highest point at $97.56 and its lowest point at $76.63 during that stretch. It currently has a 1-year price target of $93.12. With its current market cap of 29.69 billion, PCAR has annualized dividend of $1.48 while the current yield stands at 1.74%. Beta for the stock currently stands at 0.88.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of PCAR was down-trending over the past week, with a drop of -0.86%, but this was down by -6.32% over a month. Three-month performance surged to 4.07% while six-month performance fell -3.45%. The stock gained 8.75% in the past year, while it has lost -3.81% so far this year. A look at the trailing 12-month EPS for PCAR yields 6.34 with Next year EPS estimates of 7.83. For the next quarter, that number is 1.97. This implies an EPS growth rate of 42.20% for this year and 2.30% for next year. EPS is expected to grow by 15.14% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 29.10%.

Float and Shares Shorts:

At present, 348.40 million PCAR shares are outstanding with a float of 341.68 million shares on hand for trading. On Jul 14, 2022, short shares totaled 3.69 million, which was 1.06% higher than short shares on Jun 14, 2022. In addition to Mr. R. Preston Feight as the firm’s CEO & Director, Mr. Harrie C. A. M. Schippers serves as its Pres & CFO.

Institutional Ownership:

Through their ownership of 66.51% of PCAR’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 8.02% of PCAR, in contrast to 40.10% held by mutual funds. Shares owned by individuals account for 25.79%. As the largest shareholder in PCAR with 10.29% of the stake, The Vanguard Group, Inc. holds 35,786,446 shares worth 35,786,446. A second-largest stockholder of PCAR, BlackRock Fund Advisors, holds 16,499,265 shares, controlling over 4.75% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in PCAR, holding 14,248,955 shares or 4.10% stake. With a 2.66% stake in PCAR, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 9,264,114 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.23% of PCAR stock, is the second-largest Mutual Fund holder. It holds 7,758,634 shares valued at 678.96 million. Vanguard Mid Cap Index Fund holds 2.07% of the stake in PCAR, owning 7,181,481 shares worth 628.45 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for PCAR since 21 analysts follow the stock currently. There are 6 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 11 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With PCAR analysts setting a high price target of $109.00 and a low target of $81.00, the average target price over the next 12 months is $94.17. Based on these targets, PCAR could surge 28.39% to reach the target high and fall by -4.59% to reach the target low. Reaching the average price target will result in a growth of 10.92% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. PCAR will report FY 2022 earnings on 01/31/2023. Analysts have provided yearly estimates in a range of $8.07 being high and $6.83 being low. For PCAR, this leads to a yearly average estimate of $7.69. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. PACCAR Inc surprised analysts by $0.24 when it reported $2.07 EPS against a consensus estimate of $1.83. The surprise factor in the prior quarter was $0.18. Based on analyst estimates, the high estimate for the next quarter is $2.11 and the low estimate is $1.80. The average estimate for the next quarter is thus $1.97.

Dividends & Yield:

In terms of dividends, PCAR has a current ratio of $1.48, which is $1.48 over the trailing 12-months, while a dividend of $1.21 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and PCAR currently yields $1.6. In the past year, PCAR’s dividend yield has been $1.6, but when looking at the stock over the past five years, its yield has been $1.59. Accordingly, PCAR has a current buyback yield of $0.01. This was $0.01 for the TTM.

Summary of Insider Activity:

Insiders traded PCAR stock several times over the past three months with 1 Buys and 1 Sells. In these transactions, 2,000 shares were bought while 2,000 shares were sold. The number of buy transactions has increased to 60 while that of sell transactions has risen to 23 over the past year. The total number of shares bought during that period was 317,882 while 178,621 shares were sold.

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