Our Long-Term Thesis on Paccar Remains Intact, Despite Near-Term Supply Challenges

We continue to remain positive on the demand story for Paccar, despite supply headwinds. These players have been pressured by the chip shortage and higher manufacturing costs over the past year, challenging their ability to meet current demand. However, we believe freight activity will continue to be solid in the near term, giving us confidence that Paccar’s products will see strong demand from fleet owners over our forecast. In addition, we think it is important to note that industrial production continues to improve from year-end 2021. Given this backdrop, we raised our fair value estimate to $105 from $104 previously.