PCAR
PACCAR Inc
$122.55
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 0.7% above fair value
You pay
$122.55
Bear
$101.77
Fair
$121.70
Bull
$139.91
Bear
$101.77
-17.0%
4% stage 1 growth, 11% discount
Fair
$121.70
-0.7%
7% stage 1 growth, 11% discount
Bull
$139.91
+14.2%
9% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
37%
Implied Market Multiple
18.2x
Market is pricing in (growth)
7.8%
vs 7.3% base
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 $128.40 from 45 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $121.70 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