Paccar Earnings: Solid First-Quarter Performance Leads Us to Increase Our Fair Value Estimate 4%

Paccar’s stock was down approximately 7% in intraday trading on April 30. We think the market reacted negatively to slowing sales growth. Paccar’s top line increased 2% year on year in the quarter, down from the low-double-digit sales growth posted in the fourth quarter of 2023. Operating margins were stronger than we had expected. The company reported 13.5% and 27.2% operating margins in the truck and parts segments, respectively. Positive sales growth and relatively stable operating margins in the quarter led us to increase our near-term expectations. As a result, our fair value estimate increased 4% to $88 per share, up from $84 previously.