UPDATE: Credit Suisse Reiterates Neutral Rating, Raises PT on PACCAR Following Earnings Call

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In a report published Monday, Credit Suisse analyst Jamie Cook reiterated a Neutral rating on
PACCAR
PCAR
, and raised the price target from $61.00 to $63.00. In the report, Credit Suisse noted, “PCAR's stock fell 6% after reporting an in line quarter and raising its 2015 US retail sales forecast by 10K at each end. Profit pullthrough was healthy, but not exceptional, and once again PCAR tempered expectations for margins in Q1'15 and for FY'15. Gross margins are expected down sequentially and for FY'15 up only 50 bps y/y after 90 bps of improvement in 2014 (vs 2013). Cycle fears continue to weigh on the name. PCAR prudently tempered expectations on truck orders after three months of abnormal strength (Jan orders are expected Feb 3rd). Furthermore, pricing seems okay, but not robust. On the positive PCAR noted vocational markets are healthy despite concerns over Energy and sounded more encouraged with regards to upside surprise in Europe following recent easing measures. Bottom line: PCAR continues to execute nicely but there are no surprises on the upside and we believe cycle fears are relevant. We tweak our FY'15-16 EPS to $4.35-$4.60 and introduce FY'17 at $4.80. Our TP of $63 assumes 15c our FY'16 EPS (discounted back) and we reiterate our Neutral rating.” PACCAR closed on Friday at $60.11.
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Posted In: Analyst ColorPrice TargetAnalyst RatingsCredit SuisseJamie Cook
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