Paccar Earnings: Strong First-Quarter Earnings Lead Us to Raise Our Fair Value Estimate to $73

We raised our fair value estimate to $73 (up from $69 previously), following Paccar’s strong first-quarter earnings. Management called out strong demand for its premium trucks and solid freight markets as key factors. This backdrop led Paccar to post $8 billion in truck and parts sales during the quarter (up 32% year on year). Truck sales showed the strongest gains (up 36%), as customers have increasingly turned toward Paccar’s premium brands, Peterbilt, Kenworth, and DAF. Paccar’s trucks offer customers better fuel efficiency, which is a key cost-savings lever. The company’s parts business also continued to show strength (up 17%). Recall, fleet ages continue to run at high levels, which has resulted in strong demand for Paccar's aftermarket parts.