On Apr 11, 2014, we issued an updated research report on PACCAR Inc. (PCAR). This Zacks Rank #2 (Buy) stock posted a 30.68% rise in earnings to 94 cents per share in the fourth quarter of 2013 from 72 cents in the same quarter of 2012, surpassing the Zacks Consensus Estimate of 92 cents.
Revenues in the quarter increased 15% to $4.6 billion, surpassing the Zacks Consensus Estimate of $4.3 billion. The increase in earnings was attributable to the increase in truck and aftermarket parts sales along with pre-tax profits in financial services.
PACCAR enjoys a strong market share and expects a boost in sales due to the ongoing replacement of the aging truck population. The company is also well positioned in the key non-U.S. markets through its investments. However, it faces high competition in the commercial trucks market and the Financial Services segment.
PACCAR is also significantly dependent on its suppliers for providing the requisite raw materials. Any shortage in supply or increase in raw material prices can adversely affect the company’s margins.
PACCAR reported positive earnings surprises in 2 of the trailing 4 quarters with an average beat of 1.2%. The Zacks Consensus Estimate for the company’s 2014 earnings is $3.64 per share, up 10.38% over 2013.
Key Picks From the Sector
Some other automobile stocks worth considering are Tesla Motors Inc. (TSLA), Fox Factory Holding Corp. (FOXF) and Toyota Motor Corp. (TM). Toyota carries a Zacks Rank #1 (Strong Buy), while Tesla and Fox Factory carry a Zacks Rank #2.
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