Paccar Inc. Shares Plunge 2.23% as Earnings, Revenue Projections Tumble 38.38%, 21.34% on Weak Demand

Paccar Inc. (NASDAQ: PCAR) shares hit a two-year low on Wednesday, falling 1.36% to $95.57, marking the second consecutive day of losses. The stock has declined 2.23% over the past two trading sessions, with an intraday drop of 1.61%, reflecting heightened investor caution amid deteriorating financial outlooks.

The stock’s underperformance stems from sharply revised earnings and revenue projections. For the current quarter, Paccar is expected to report earnings per share (EPS) of $1.14, a 38.38% decline year-over-year, while revenue is forecast to fall 21.34% to $6.06 billion. Full-year estimates also paint a bleak picture, with EPS and revenue projected to decline by 33.29% and 16.57%, respectively. Analysts attribute this to weak demand for commercial vehicles in North America and Europe, compounded by inflationary pressures and supply chain disruptions.

Valuation metrics further underscore the bearish sentiment. Paccar’s forward P/E ratio of 18.4 exceeds the industry average of 14.59, while its PEG ratio of 3.89 signals overvaluation relative to growth prospects. A Zacks Rank of #4 (Sell) highlights the lack of confidence in near-term recovery, as analyst estimates have remained stagnant for 30 days, reflecting no optimism about operational improvements.

Regulatory and macroeconomic risks add to the headwinds. The trucking sector’s reliance on global markets—53.6% of revenue from the U.S. and 24.9% from Europe—exposes Paccar to economic slowdowns and trade tensions. Regulatory shifts, such as EPA emissions rule reassessments, could delay pre-buying activity, further dampening 2026 earnings. These factors, combined with limited diversification into emerging technologies, leave the company vulnerable to cyclical downturns and long-term industry transitions.

Investor sentiment remains subdued, with the stock lagging behind the S&P 500 and its sector peers. Paccar’s underperformance underscores the need for strategic adjustments, including cost optimization or innovation in electrification. Until the company demonstrates a clear path to profitability amid these challenges, the stock is likely to remain a laggard, with downside risks outweighing potential upside.