Rating Change #5
PACCAR Inc (PCAR) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and attractive valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- PCAR's very impressive revenue growth greatly exceeded the industry average of 23.1%. Since the same quarter one year prior, revenues leaped by 67.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- PACCAR INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, PACCAR INC increased its bottom line by earning $1.25 versus $0.31 in the prior year. This year, the market expects an improvement in earnings ($2.60 versus $1.25).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 134.9% when compared to the same quarter one year prior, rising from $119.90 million to $281.60 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Machinery industry and the overall market on the basis of return on equity, PACCAR INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
PACCAR Inc, together with its subsidiaries, designs, manufactures, and distributes light-, medium-, and heavy-duty trucks and related aftermarket parts primarily in the United States and Europe. It markets its heavy-duty diesel trucks under the Kenworth, Peterbilt, and DAF nameplates. The company has a P/E ratio of 21.5, equal to the average automotive industry P/E ratio and above the S&P 500 P/E ratio of 17.7. PACCAR has a market cap of $15.5 billion and is part of the consumer goods sector and automotive industry. Shares are down 27.7% year to date as of the close of trading on Wednesday.You can view the full PACCAR Ratings Report or get investment ideas from our investment research center.
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