PCAR
PACCAR Inc
$122.45
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 29.4% above fair value
You pay
$122.45
Bear
$75.53
Fair
$94.62
Bull
$111.83
Bear
$75.53
-38.3%
4% stage 1 growth, 11% discount
Fair
$94.62
-22.7%
7% stage 1 growth, 11% discount
Bull
$111.83
-8.7%
9% stage 1 growth, 11% discount
Adjust Assumptions
6.8%
11.0%
3.0%
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
21.4x
Market is pricing in (growth)
9.9%
vs 6.8% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (45 analysts)
$132.40
Divergence from AlphaVal
29%
Summary
Using a two-stage FCF DCF with 7% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $94.62 per share.
Warnings
Wall Street's average price target is $132.40 (from 45 analysts). Our estimate is 29% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions