UPDATE: Bank of America Downgrades PACCAR to Neutral on Likely Cuts to 2H12 Production

Bank of America reduced its rating on PACCAR

from Buy to Neutral and lowered its price objective from $50 to $45. Bank of America noted, "We downgrade PCAR from a Buy to a Neutral as we expect weak Class 8 net orders YTD will force truck OEMs to implement additional production cuts in 2H12. Based on our earnings estimates, we now expect PCAR's 2Q12 earnings results will come below consensus of $0.82 when the company reports earnings on 7/24. Additionally, given decelerating production levels, we now model Y/Y earnings declines in 3Q12 and 4Q12. We are adjusting our quarterly truck production forecast for the weaker orders and now expect a ~20% Y/Y decline in Class 8 production in 2H12." PACCAR closed at $36.70 on Monday.