In a report published Wednesday, D.A. Davidson analyst JB Groh reiterated a Buy rating on PACCAR (NASDAQ: PCAR), and raised the price target from $60.00 to $68.00.
In the report, D.A. Davidson noted, “PACCAR reported Q2 EPS of $0.82, well above our $0.72 estimate and the Street mean of $0.75. The tax rate was slightly higher than we had modeled and was a ~$0.02 headwind. Manufacturing revenues came in at $4.01 billion (down ~4.3% year-over-year), vs. our estimate of $3.9 billion and the Street mean of $4.0 billion. Overall gross margins were down 40bp year-over-year to 12.9%, but 70bp above what we had modeled. Financial services posted revenues of $289 million, ~$6 million below our estimate. Sales in the U.S. & Canada and Other (Mexico, Australia, etc.) increased sequentially by 11.6% and 22.7%, respectively. Sales in Europe ticked down 1.5% sequentially, while sales improved slightly on a year-over-year basis. PACCAR delivered ~34,800 (+14% sequentially) trucks in the quarter, which exceeded management’s guidance of 5%-10% sequential growth. Management expects Q3 deliveries to increase 1%-2% on a sequential basis, driven by slightly higher build rates and offset by the typical 2-week factory summer shutdown in Europe.”
PACCAR closed on Tuesday at $57.25.
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Posted in: Analyst Color, Price Target, Analyst Ratings