Paccar (PCAR) is poised for growth, according to a recent report from BofA Securities, which upgraded the company from “Neutral” to “Buy” while raising its price target from $116 to $121.50. The investment firm cites growing demand in the truck market as a key factor likely to benefit Paccar in 2026, following a challenging year for the company.
BofA’s Positive Outlook for Paccar
BofA’s upgrade comes on the heels of an underwhelming 2024 for Paccar, which struggled with price versus cost concerns and a downturn in the truck market’s production. Despite these challenges, BofA sees a recovery on the horizon, predicting that trucks will be the first sector to return to balance as the broader machinery market adjusts to current supply and demand conditions.
According to the note, while pricing risks may persist in the first half of 2025, truck demand is expected to show early signs of recovery later this year. This growth will likely provide visibility for a surge in 2026, with Paccar potentially reporting a new peak in earnings per share (EPS).
Machinery Market Dynamics and Supply/Demand Imbalance
BofA highlighted that machinery end markets are currently experiencing a supply/demand imbalance, where there is an oversupply of equipment amid slower demand. However, the firm expects the truck segment to be the first to normalize, which bodes well for Paccar’s future growth prospects.
The shift in demand dynamics could enable Paccar to regain momentum and capitalize on the expected recovery in truck sales, positioning the company for strong performance in 2026.
Paccar Positioned for a Strong 2026
With its solid market position, BofA sees Paccar as one of the few original equipment manufacturers (OEMs) in the sector likely to report a new peak in EPS in the coming year. The firm’s positive outlook suggests that Paccar will benefit from increasing truck demand, making the company a standout in the machinery sector’s recovery.
Investors are watching closely as the truck market begins to show signs of life, and Paccar’s improved earnings prospects in 2026 could lead to continued growth for the company.