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Paccar (PCAR) Down 9.8% Since Last Earnings Report: Can It Rebound?

Zacks Equity Research

It has been about a month since the last earnings report for Paccar (PCAR). Shares have lost about 9.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Paccar due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

PACCAR’s Earnings Miss Estimates in Q2, Improve Y/Y

PACCAR’s second-quarter 2019 earnings were $1.78 per share, missing the Zacks Consensus Estimate of $1.81. In second-quarter 2018, the company’s earnings per share were $1.59. This year-over-year improvement can be attributed to a record truck delivery and part sales.

The company posted quarterly consolidated net sales and revenues of $6.63 billion, up from the prior-year quarter figure of $5.81 billion.

Segmental Results

The pre-tax revenues from the Truck, Parts and Other segment increased to $713.3 million from $632.6 million recorded a year ago.

Revenues from the Financial Services segment rose to $80.3 million from $72.4 million a year ago. Pre-tax income increased to $814.4 million from $719.6 million in the year-ago quarter.

Financial Position

PACCAR’s cash and marketable debt securities amounted to $4.18 billion as of Jun 30, 2019, compared with $4.30 billion as of Dec 31, 2018.

Details on Class 8 Truck and View

In the United States and Canada, on a year-to-date basis, Class 8 truck industry retail units sold rose 20% year over year. For 2019, the Class 8 truck industry retail unit sale in the United States and Canada is anticipated to rise to 300,000-320,000 from the previously mentioned 295,000-315,000.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

At this time, Paccar has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Paccar has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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