Paccar Inc. is a global technology leader in the design, manufacture and customer support of high-quality light-, medium- and heavy-duty trucks under the Kenworth, Peterbilt and DAF nameplates. PACCAR also designs and manufactures advanced diesel engines, provides financial services and information technology, and distributes truck parts related to its principal business. The company is based in Bloomfield Hills, Michigan.
PCAR Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Paccar Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Paccar Inc ranked in the 37th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 43.5%. The most interesting components of our discounted cash flow analysis for Paccar Inc ended up being:
The company has produced more trailing twelve month cash flow than 84.46% of its sector Industrials.
Paccar Inc's weighted average cost of capital (WACC) is 7%; for context, that number is higher than only 9.68% of tickers in our DCF set.
PCAR's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 3%; for context, that number is higher than only 9.68% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
LECO, WM, BAH, CAT, and VEC can be thought of as valuation peers to PCAR, in the sense that they are in the Industrials sector and have a similar price forecast based on DCF valuation.