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Paccar Raises 2021 Guidance on Freight Activity Strength; We Expect Volume to Remain Elevated

Dawit Woldemariam Equity Analyst

Analyst Note

| Dawit Woldemariam |

Paccar posted strong first-quarter results that were above our expectations, leading us to raise our fair value estimate to $97 from $94, reflecting increased demand for aftermarket parts. Strong freight activity pushed sales in the parts business to $1.16 billion, up 16% year over year. E-commerce sales shined as well, up over 30% year over year, showing its value for customers by providing consistent parts availability. Pretax profit came in at $251.3 million, up 17% year over year.

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Company Profile

Business Description

Paccar is a leading manufacturer of medium- and heavy-duty trucks under the premium brands Kenworth and Peterbilt, which are primarily sold in the NAFTA region and Australia, and DAF trucks, which are sold in Europe and South America. Its trucks are sold through over 2,200 independent dealers globally. Paccar Financial Services provides retail and wholesale financing for customers and dealers, respectively. The company commands approximately 30% of the Class 8 market share in North America and 16% of the heavy-duty market share in Europe.

777-106th Avenue N.E.
Bellevue, WA, 98004
T +1 425 468-7400
Sector Industrials
Industry Farm & Heavy Construction Machinery
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 26,000