PACCAR Suffering U.S. Slowdown

Aug 28, 2008 (Zacks Investment Research via COMTEX) -- PCAR | Quote | Chart | News | PowerRating -- PACCAR, Inc. (PCAR) is benefiting from rising prices and increasing market share, along with strong growth in Mexico and Australia. However, a downturn in the U.S. leads us to rate the stock a Hold, with a target of $44. Average transaction prices are rising about 5% in both North America and Europe due to the increased emission content. The fastest growing businesses of the company are PACCAR Parts and PACCAR Financial Services. With PacLease in Europe, the company expects to see continued Financial Services growth in Europe. The company expects 2008 industry sales in Europe to be at a record of 350,000-360,000 units. As of June 30, the company repurchased 5.62 million shares of its common stock for $262.5 million under its existing $300 million buyback program. Recently, it approved the repurchase of an additional $300 million of its common stock. However, truck retail sales during the first half of the year dampened due to the increase in diesel prices along with the depressing housing market scenario and lower auto production. The company lowered its Class 8 retail sales expectation from 175,000 215,000 trucks to 150,000- 165,000 trucks for 2008. Further, PACCAR faces strong competition from its three principal competitors, Navistar and Daimler and Volvo, in the U.S. and the Canada truck market. Read the full analyst report on PCAR

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