Value
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.9 |
| P/S | 8.8 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 7.1 |
| PEG | 6.1 |
| Analyst target | 4.0 |
- ▸Forward P/E: 17.6x
- ▸PEG: 1.22
PCAR · Why this verdict
Why PACCAR (PCAR) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.1/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Two consecutive earnings misses of roughly 1% to 3% below estimates in a period of 9% revenue decline reflect the cyclical nature of truck demand; modest misses at the trough of the cycle may precede stabilization as order books normalize. Earnings | Earnings beat consensus by more than 2% in at least 2 of the next 4 quarters as revenue decline stabilizes above negative 5% year over year. | →Stable |
| CounterRevenue declining 9% year over year in heavy machinery typically signals a prolonged demand downcycle; consecutive misses suggest the revenue trough has not yet been reached and estimates may continue to drift lower. | ||
PACCAR has formed a golden cross with rising on-balance volume and momentum score of 7.4, placing it in a confirmed technical breakout that is broadly positive for near-term price action in heavy construction and farm machinery. V9 | Price holds above the 200-day moving average for at least 6 consecutive months while on-balance volume continues to rise. | →Stable |
| CounterThe stock is already 5.9% above its analyst price target, meaning the breakout has occurred into overvalued territory; technical breakouts above consensus value targets historically underperform. | ||
At a forward P/E of 17.8x with the stock already 5.9% above analyst targets, the market is pricing in a faster recovery than consensus expects; if this optimism is validated, the stock could re-rate to higher analyst targets. Valuation breakdown | Analyst consensus price target rises above $128 within 6 months, restoring positive upside and validating the premium the market is currently paying. | →Stable |
| CounterA PEG ratio of 1.23 combined with 9% revenue decline and two consecutive misses provides little justification for the current premium; analysts are more likely to reduce targets than raise them. | ||
PACCAR pays a dividend with 116% earnings coverage, providing an income floor that supports the total return case even if price appreciation is limited by the above-target valuation. Catalyst breakdown | Dividend per share is maintained or increased over the next 4 quarters without a reduction. | →Stable |
| CounterA 9% revenue decline and two consecutive earnings misses could pressure the dividend if the earnings base shrinks further; 116% coverage leaves little room if earnings fall materially below estimates. | ||
Two consecutive earnings misses of roughly 1% to 3% below estimates in a period of 9% revenue decline reflect the cyclical nature of truck demand; modest misses at the trough of the cycle may precede stabilization as order books normalize.
→StableEarnings
- Expectation
- Earnings beat consensus by more than 2% in at least 2 of the next 4 quarters as revenue decline stabilizes above negative 5% year over year.
CounterRevenue declining 9% year over year in heavy machinery typically signals a prolonged demand downcycle; consecutive misses suggest the revenue trough has not yet been reached and estimates may continue to drift lower.
PACCAR has formed a golden cross with rising on-balance volume and momentum score of 7.4, placing it in a confirmed technical breakout that is broadly positive for near-term price action in heavy construction and farm machinery.
→StableV9
- Expectation
- Price holds above the 200-day moving average for at least 6 consecutive months while on-balance volume continues to rise.
CounterThe stock is already 5.9% above its analyst price target, meaning the breakout has occurred into overvalued territory; technical breakouts above consensus value targets historically underperform.
At a forward P/E of 17.8x with the stock already 5.9% above analyst targets, the market is pricing in a faster recovery than consensus expects; if this optimism is validated, the stock could re-rate to higher analyst targets.
→StableValuation breakdown
- Expectation
- Analyst consensus price target rises above $128 within 6 months, restoring positive upside and validating the premium the market is currently paying.
CounterA PEG ratio of 1.23 combined with 9% revenue decline and two consecutive misses provides little justification for the current premium; analysts are more likely to reduce targets than raise them.
PACCAR pays a dividend with 116% earnings coverage, providing an income floor that supports the total return case even if price appreciation is limited by the above-target valuation.
→StableCatalyst breakdown
- Expectation
- Dividend per share is maintained or increased over the next 4 quarters without a reduction.
CounterA 9% revenue decline and two consecutive earnings misses could pressure the dividend if the earnings base shrinks further; 116% coverage leaves little room if earnings fall materially below estimates.
TrendMatrix Research · core thesis
Engine thesis — one sentence
PACCAR has formed a golden cross breakout with the stock above all moving averages and a bullish MACD, but has surpassed analyst targets with negative upside of 5.9%, revenue is declining 9% year over year, and two consecutive earnings misses signal fundamental weakness in heavy truck demand.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.4 |
| ROA | 2.8 |
| Gross margin | 0.0 |
| Op margin | 4.1 |
| Net margin | 4.5 |
| Current ratio | 7.4 |
| FCF quality | 4.7 |
| Moat | 4.4 |
| Piotroski F | 7.8 |
- ▸Earnings quality warning: 60% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
3.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.3 |
| EPS growth | 5.9 |
- ▸Declining revenue: -9%
Momentum
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 8.8 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.2 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 7.3 |
| Price target | 5.9 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.7 |
| quality rank | 6.8 |
| growth rank | 1.8 |
Technical
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.2 |
| support resistance | 3.9 |
| 52w position | 8.2 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.5 |
| days to cover | 6.0 |
| volatility | 6.0 |
| put call | 5.8 |
| implied vol | 7.0 |
| beta | 7.1 |
| debt equity | 6.4 |
| news risk | 6.0 |
Catalyst
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 2.7 |
| dividend safety | 5.2 |
| news activity | 5.0 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend: 117.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- MOMENTUM:7.1>=5.5
- INSIDER:OK
- EARNINGS_PROXIMITY:24d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.9=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.89
Upside
-4.6%
Downside
5.2%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 54, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.1 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Momentum at 7.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.9=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.89 — supplementary context, not the trigger for this path.
The strongest dimensions are Momentum at 7.1, Sentiment at 6.6, and Risk (lower is worse) at 6.6; the weakest are Growth at 3.1, Peer rank at 4.3, and Catalyst at 4.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.89 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Golden Cross Breakout Momentum
Trip ifPrice drops below the 200-day moving average and holds below that level for more than 10 consecutive trading days.
- P2Earnings Miss Revenue Decline
Trip ifRevenue decline exceeds 12% year over year for 2 consecutive quarters, indicating the demand downcycle is deepening.
- P3Above Target Valuation Risk
Trip ifAnalyst consensus price target falls below $110, indicating a downgrade cycle that worsens the overvaluation gap.
- P4Dividend Coverage Income Floor
Trip ifDividend per share is reduced by more than 15% in any single declaration.