Paccar: Tariff Tailwinds, Market Share Gains, and Emissions-Driven Upside Support Overweight Rating and $133 Price Target

Analyst Tami Zakaria from J.P. Morgan maintained a Buy rating on Paccar and increased the price target to $133.00 from $108.00.

Tami Zakaria has given his Buy rating due to a combination of factors tied to Paccar’s margin outlook, competitive positioning, and regulatory tailwinds. He expects profitability to improve meaningfully as the recent changes to Section 232 tariffs ease cost pressures and allow pricing and volumes to turn positive again, driving notable margin expansion into 2026. Paccar’s predominantly U.S.-based manufacturing base should leave it far less exposed to new tariff costs than key rivals that assemble trucks in Mexico, likely forcing those competitors to implement much larger price increases. This cost and pricing gap is projected to translate into meaningful market share gains for Paccar in the U.S. heavy-duty truck market, with even a modest share increase implying billions of dollars in additional annual truck revenue, and a larger installed base that will fuel faster growth in the company’s higher-margin Parts business. Upcoming NOx 2027 emissions rules are also expected to push industry pricing higher and encourage some pre-buy in late 2026, creating potential upside to current production forecasts and further supporting Paccar’s earnings trajectory.

Tami Zakaria’s rating is based on a valuation framework that assumes rising earnings and a supportive industry backdrop. He raises his 2026 and 2027 EPS estimates and applies an approximately 18x forward P/E multiple to arrive at a December 2026 price target of $133, which is above Paccar’s historical mid-cycle multiple. In his view, this richer multiple is warranted because his model still assumes North American truck volumes remain somewhat below long-term replacement levels, leaving room for cyclical upside. At the same time, the company’s gross margins appear to be stabilizing at levels only slightly under prior peaks, even before fully realizing the long-term market share and Parts growth opportunities he outlines. Collectively, these dynamics support an Overweight/Buy stance on Paccar’s shares.