DCF Studio

    PCAR · NMS · Industrials

    PACCAR Inc

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 82.00

    Market price

    USD 102.74

    Implied upside

    -20.2%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedCapital expenditure runs at 4.6% of revenue against depreciation of 2.8%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 82.00-20.2%
    Exit multiple
    USD 126.68+23.3%
    Market price
    USD 102.74

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn3bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 28.7bnUSD 31.1bnUSD 33.4bnUSD 35.7bnUSD 37.9bnUSD 39.9bnUSD 41.8bnUSD 43.4bnUSD 44.8bnUSD 45.9bn+5.4%
    EBITUSD 3.9bnUSD 4.2bnUSD 4.6bnUSD 4.9bnUSD 5.2bnUSD 5.5bnUSD 5.7bnUSD 5.9bnUSD 6.1bnUSD 6.3bn+5.4%
    NOPATUSD 3.1bnUSD 3.4bnUSD 3.6bnUSD 3.9bnUSD 4.1bnUSD 4.3bnUSD 4.5bnUSD 4.7bnUSD 4.8bnUSD 5.0bn+5.4%
    Add depreciation & amortisationUSD 789.1mUSD 854.4mUSD 918.9mUSD 981.7mUSD 1.0bnUSD 1.1bnUSD 1.1bnUSD 1.2bnUSD 1.2bnUSD 1.3bn+5.4%
    Less capital expenditureUSD -1.3bnUSD -1.4bnUSD -1.6bnUSD -1.7bnUSD -1.8bnUSD -1.9bnUSD -2.1bnUSD -2.2bnUSD -2.2bnUSD -2.3bn+6.4%
    Capex, % of revenue4.6%4.7%4.7%4.8%4.8%4.9%4.9%5.0%5.0%5.1%-
    Less increase in working capitalUSD -119.6mUSD -1.2bnUSD -1.2bnUSD -1.1bnUSD -1.1bnUSD -1.0bnUSD -930.7mUSD -823.4mUSD -699.3mUSD -560.1m+18.7%
    Free cashflow to firmUSD 2.4bnUSD 1.6bnUSD 1.8bnUSD 2.0bnUSD 2.2bnUSD 2.4bnUSD 2.7bnUSD 2.9bnUSD 3.1bnUSD 3.3bn+3.5%
    Discount factor0.96130.88840.82110.75880.70130.64810.59900.55350.51160.4728-
    Present valueUSD 2.3bnUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.6bn-
    Present Value Of The ForecastUSD 16.2bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.971Reported 0.957, pulled toward 1.0 (Blume)
    Cost of equity9.00%Risk-free + beta x equity risk premium
    Cost of debt6.89%Assumed: risk-free + 200bp (interest expense not reported)
    Market capitalisationUSD 54.1bn77.6% of capital
    Total debtUSD 15.6bn22.4% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.20%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 82.00

    67% of EV

    Forecast FCFF, final year
    USD 3.3bn
    Capex at depreciation, working capital in reinvestment
    USD 5.0bn
    Less reinvestment at g/ROIC (21.4% of NOPAT)
    USD -1.1bn
    Capitalised
    USD 3.9bn
    ROIC (reported)
    11.7%
    Terminal value, undiscounted
    USD 70.0bn
    Terminal value, discounted
    USD 33.1bn
    Enterprise value
    USD 49.3bn
    Less net debt
    USD 6.1bn
    Equity value
    USD 43.2bn

    Exit at 15.9x EBITDA

    Value per shareUSD 126.68

    78% of EV

    Terminal value, undiscounted
    USD 119.8bn
    Terminal value, discounted
    USD 56.6bn
    Enterprise value
    USD 72.9bn
    Less net debt
    USD 6.1bn
    Equity value
    USD 66.7bn

    Spread between methods: 43%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.20%124.44130.14137.64147.80162.07
    7.20%98.23100.66103.81107.93113.40
    8.20%80.0180.8582.0083.5385.58
    9.20%66.6566.6766.8267.1267.63
    10.20%56.4856.0655.6855.3755.12

    Outlined: this model. Green text: above today's price of 102.74. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-0.4%4.9%8.1%
    EBIT margin16.9%13.7%16.2%
    Discount rate-8.2%7.2%
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.