Paccar Details Its Zero-Emission Vehicle Strategy at Its 2022 Investor Day

Narrow-moat Paccar held its investor day on June 1, where it dug further into its zero-emission vehicle strategy. Following the event, we raised our fair value estimate to $104 from $103. Management provided its 2022 sales outlook for the parts business, which is expected to grow between 12% and 15%. Supply headwinds have pushed fleet owners to run their trucks a lot longer than usual, resulting in strong demand for Paccar’s parts business in 2021 (demand strength has also continued into 2022). This backdrop gives us confidence to raise our sales outlook for the parts segment to 13.5% year-on-year growth in 2022, up from 11% annual growth.