Key Stats for PACCAR Stock
- Past-Week Performance: -4.2%
- 52-Week Range: $84.7 to $131.9
- Current Price: $115.3
What Happened?
PACCAR (PCAR), once a pure truckmaker generating $1.4 billion in annual profit, has structurally reengineered itself into a capital-light industrial platform, with its higher-margin parts and financial services businesses now contributing 71% of total profit on $28.4 billion in FY 2025 revenue.
PACCAR’s Q4 2025 revenue of $6.82 billion beat the IBES consensus estimate of $6.26 billion, and the company reported adjusted full-year net income of $2.64 billion, marking the fourth-highest profit year in its 121-year history despite a soft freight cycle and a year-long tariff headwind.
PACCAR Parts, the company’s aftermarket business supplying replacement components to truck operators, posted record annual revenue of $6.9 billion with pretax income of $1.67 billion, while PACCAR Financial Services, which provides loans and leases to truck buyers, delivered record revenues of $2.21 billion and grew pretax income 11% to $485 million, outperforming its peer group’s return on assets by 47%.
CEO Preston Feight stated on the Q4 2025 earnings call that “the Section 232 truck tariff policy that became effective on November 1 provides advantages to PACCAR, who produces trucks in the United States, Canada and Mexico for each local market,” reflecting the company’s completed shift of medium-duty production from Canada and Mexico into its Chillicothe, Ohio and Denton, Texas facilities.
With 380,000 PACCAR engines now crossing the five-year mark into higher parts-consumption territory, a confirmed $10,000 price step-up tied to EPA27 NOx regulations taking effect in January 2027, and management guiding parts revenue growth of 4% to 8% in 2026, PACCAR’s structural profit floor is rising even before the next freight upcycle reaches full velocity.
Wall Street’s Take on PCAR Stock
The Section 232 tariff advantage, which exempts PACCAR’s U.S.-built trucks from the import duties now hitting competitors, directly supports the margin recovery already showing up in Q1 2026 gross margin guidance of 12.5% to 13%, up from 12% in Q4 2025.
Consensus estimates reflect that recovery: revenue is projected to grow from $26.2 billion in FY 2025 to $27.7 billion in FY 2026E, while normalized EPS is forecast to rise 11.7% to $5.59, supported by parts segment growth of 4% to 8% and continued Financial Services expansion.
Net income margin tells the deeper story: the model projects expansion from 10.1% in FY 2025 to 11.6% in FY 2027E and 15.5% in FY 2029E, anchored by the parts business’s structural 30%-plus gross margin and a growing installed base of over 380,000 PACCAR engines entering peak replacement years.
Wall Street leans cautious but is quietly upgrading its target: 6 buys, 1 outperform, and 14 holds among 17 analysts, with a mean price target of $125.08, implying 8.4% upside from the current price of $115.34.
The $58 spread between the analyst low target of $92.00 and the high of $150.00 reflects two very different readings of the same story: the bear case prices in a freight-cycle rollover that erodes truck margins, while the bull case prices in the EPA27 pre-buy acceleration and sustained parts growth that management has guided through 2026.
What Does the Valuation Model Say?
TIKR’s model targets $150.86 by December 2030, implying a 30.8% total return at a 5.7% annual IRR, built on a mid-case revenue CAGR of 6.5% and net income margin expanding to 12.0% by the end of the forecast period.
The market is treating FY 2025’s 10.1% net income margin as the new normal, ignoring that it was compressed by a year of one-sided tariff exposure that the Section 232 ruling has now reversed.
The operational evidence is direct: parts and financial services together generated $2.16 billion in pretax income in FY 2025, a figure that is structurally recurring and grows regardless of truck delivery volume.
Management confirmed on the February 10 Analyst Day that dealers are investing record capital into their networks, which directly feeds parts demand and supports TIKR’s assumption of accelerating parts revenue growth through 2026 and beyond.
The key risk is freight market deterioration: if truckload carrier profitability stalls and the EPA27 pre-buy cycle fails to materialize in H2 2026, truck segment gross margins stay compressed and the model’s 12.0% net income margin assumption for FY 2027E does not hold.
Watch the Q1 2026 earnings call for confirmation that gross margins landed in the guided 12.5% to 13% range and that parts revenue grew at least 2% to 4% year-over-year, the two numbers that validate the structural margin recovery thesis.
Should You Invest in PACCAR Inc?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up PCAR stock and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
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