Bernstein analyst Chad Dillard has reaffirmed an Outperform rating on PACCAR (NASDAQ:PCAR), maintaining a $138.00 price target after attending the company’s 2026 analyst day at its manufacturing facility in Denton, Texas. The stock is trading at $128.79, roughly 2.3% below its 52-week high of $131.88.
In his note, Dillard emphasized PACCAR’s focus on its Parts strategy as a structural change intended to reduce the company’s exposure to cyclical swings and to lift long-term profitability. Bernstein also flagged PACCAR’s demonstration of enhanced manufacturing flexibility at the analyst day, saying this capability is helping the company manage tariff-related challenges in what the analyst described as a post-globalized world.
As a member of the Machinery industry, PACCAR has sustained regular distributions to shareholders, paying dividends for 56 consecutive years and offering a current yield of 2.15%.
Bernstein’s analysis suggests the market may be undervaluing PACCAR’s transition away from a predominantly truck-centric profit mix toward a higher proportion of Parts revenue and profit. The firm projects the Parts segment could represent nearly two-thirds of PACCAR’s Truck, Parts & Other profits by 2030, compared with 58% in 2025 and 52% in 2020. That mix shift is tied to the firm’s estimate that earnings per share could increase by roughly 33%, equivalent to about $1.80, relative to 2026 levels.
Valuation is another focal point in Bernstein’s view. The firm notes PACCAR trades at about 17 times earnings and characterizes that multiple as - in its words - "far too cheap for where we are in the cycle."
Recent company results were mixed but tilted toward revenue strength. PACCAR reported fourth-quarter 2025 revenue of $6.82 billion, exceeding the consensus expectation of $6.03 billion, a 13.1% upside. Reported earnings per share were $1.06, narrowly missing the forecast of $1.07. Bernstein’s upbeat stance appears informed in part by the revenue outperformance.
Summary: Bernstein’s Chad Dillard reiterated an Outperform rating on PACCAR with a $138 target after the company’s 2026 analyst day. The brokerage cited a strategic pivot toward the Parts business, enhanced manufacturing flexibility to navigate tariffs, and recent revenue outperformance, while noting a small EPS miss. PACCAR trades near $128.79 and yields 2.15% on dividends maintained for 56 years.
Key points:
- PACCAR’s Parts strategy is intended to reduce cyclicality and improve structural profitability, potentially shifting the profit mix to nearly two-thirds Parts by 2030.
- Management highlighted increased manufacturing flexibility at the Denton plant, which Bernstein says aids the company in responding to tariffs and supply dynamics.
- Fourth-quarter 2025 revenue beat expectations at $6.82 billion, while EPS of $1.06 slightly missed the $1.07 forecast.
Risks and uncertainties:
- EPS performance: The company’s reported EPS of $1.06 narrowly missed expectations, indicating potential volatility in near-term earnings for investors to monitor.
- Tariff and trade environment: Bernstein pointed to tariff navigation as a driver for manufacturing flexibility, highlighting exposure to trade-related uncertainty.
- Cyclicality: While the Parts strategy is designed to lessen cyclicality, the company operates in an industry historically subject to cyclical swings, which remains a source of uncertainty.