Why PACCAR, Inc. Shares Will Truck Ahead to $80

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of PACCAR, Inc.  (NASDAQ: PCAR  ) gained about 1% today after Goldman Sachs upgraded the truck manufacturer from neutral to buy.

So what: Along with the upgrade, analyst Jerry Revich boosted his price target to $80, representing about 20% worth of upside to yesterday's close. So while contrarians might be turned off by the stock's strength in recent months, Revich's call suggests that PACCAR's operating tailwinds still aren't being fully appreciated by Mr. Market. 

Now what: According to Goldman, PACCAR's risk/reward trade-off remains quite attractive at this point. "While investor focus is on new European (30% of PCAR profits) engine regulations, freight fundamentals are overwhelmingly positive entering the sixth quarter of recovery, providing visibility on a sustained truck capex recovery," said Revich. "In US truck (57% of PCAR profits) we acknowledge recently elevated expectations, but believe tight truck supply and a modest freight recovery will sustain newfound trucker pricing discipline and equipment refresh cycle through at least 2015." When you couple those positive trends with PACCAR's still-reasonable forward P/E of 16, it's tough to disagree with Goldman's upgrade. 

Nine rock-solid dividend stocks you can buy today
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend-paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2889577, ~/Articles/ArticleHandler.aspx, 8/29/2015 7:56:57 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Brian Pacampara

I take a look at big 10% moves, as well as stock-shaking analyst calls, on a daily basis for The Fool. While I don't believe in active trading, closely monitoring Mr. Market's mood swings can help identify long-term opportunities.

Today's Market

updated 22 hours ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:00 PM
PCAR $59.45 Down -0.13 -0.22%
Paccar CAPS Rating: *****