Bernstein SocGen Group has raised its target price for PACCAR (NASDAQ:PCAR) to $138.00 from $125.00 and maintained an Outperform rating on the stock. PACCAR was trading at $120.81 at the time cited, with a market capitalization of $63.45 billion and a price-to-earnings ratio of 27.08.
The upward revision to the price target comes amid a set of results and guidance that Bernstein characterized as mixed. PACCAR reported fourth-quarter earnings that were broadly in line with expectations and issued first-quarter delivery guidance that matched the consensus view. However, the company’s guidance for parts and operations margins landed about 75 basis points below what analysts had been expecting.
Following the earnings announcement, PACCAR shares slipped, a reaction Bernstein linked to the margin guidance missing elevated expectations. The analyst note pointed out that the stock had already climbed roughly 10% year-to-date, outperforming the S&P 500 by about 8%, which had raised the bar for near-term company performance.
Bernstein analyst Chad Dillard observed that with investor expectations now "re-calibrated," the environment is "right for a strong margin recovery" at the truck manufacturer. The firm added that, after the reset in expectations, several catalysts could support continued gains in PACCAR’s share price, saying "the stock should continue to work."
On the company’s reported fourth-quarter financials, PACCAR posted earnings per share of $1.06, narrowly missing the consensus $1.07 estimate. Revenue for the quarter came in at $6.82 billion, above the expected $6.03 billion, signaling revenue strength despite the slight EPS shortfall.
These results and guidance arrive against a backdrop of broader market uncertainty that has influenced investor sentiment, according to the coverage. The mixed nature of the quarter - stronger-than-expected revenue but a small EPS miss and weaker margin guidance - has drawn close scrutiny from analysts and market participants, who are assessing the implications for future profitability and stock performance.
Bernstein’s outlook, embodied by the higher price target and retained Outperform rating, reflects a view that operational and margin improvements could materialize after the reset in expectations. At the same time, the near-term shortfall in parts and operations margin guidance and the EPS miss underscore current areas of investor concern.
Summary
Bernstein raised PACCAR’s price target to $138 and kept an Outperform rating despite in-line quarterly results, delivery guidance that met expectations, and parts and operations margins guided roughly 75 basis points below consensus. The firm said lowered expectations set the stage for a potential margin recovery and cited catalysts that could support the shares after the recent reset in investor sentiment.