PCAR
PACCAR Inc
$109.35
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 9.9% below fair value
You pay
$109.35
Bear
$101.52
Fair
$121.40
Bull
$139.57
Bear
$101.52
-7.2%
4% stage 1 growth, 11% discount
Fair
$121.40
+11.0%
7% stage 1 growth, 11% discount
Bull
$139.57
+27.6%
9% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
37%
Implied Market Multiple
15.9x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $127.40 from 45 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $121.40 per share.
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