🚚 The EPA Pre-buy Catalyst Driving PACCAR Higher

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Every week, we cut through the noise and surface opportunities that institutions are already eyeing - but with strategies tailored for retail traders.

We’ll cover:

• Why PACCAR (PCAR) is a Buy at current levels

• How to take advantage with a defined-risk, income-generating option strategy

🔍 Trade Thesis: PCAR Is Shifting into High Gear for a Major Breakout

PACCAR Inc. (PCAR), the premium truck manufacturer behind Kenworth, Peterbilt, and DAF, is signaling a major move higher. While the trucking industry has faced headwinds, there is a powerful lineup of catalysts that could send the stock higher.

Behind the scenes:

🚚 EPA 2027 Pre-buy Cycle: A multi-year rush to buy trucks before new emissions rules.

⛽ Lower Oil Prices: Lower diesel means truckers have more room to invest in equipment.

📈 Technical Breakout: PCAR has broken out on volume, showing institutional buying.

📊 The Fundamentals Are Solid, with Catalysts Ahead

💰 Revenue & Profits: Q3 2025 softened, but PACCAR still delivered consistent performance and expects stable Q4 results. Tariff relief in 2026 should help margins.

📈 High-Margin Parts Division: Record revenue with nearly 30 percent margins continues to support earnings.

💪 Balance Sheet Strength: A+/A1 credit rating gives PACCAR the flexibility to invest and weather cycles.

💸 Shareholder Returns: Five-year dividend growth of 12 percent plus a recent three-dollar special dividend.

📐 Valuation Is Reasonable, with Room to Run

⚖️ Market Leader: More than 30 percent of the North American heavy-duty truck market.

🏆 Premium Brands: Kenworth and Peterbilt command higher prices and strong loyalty.

🎯 Analyst Targets:

• Average: $106.54

• High: $121.50

🧭 Technicals Confirm: This Chart Is Breaking Out

🏷️ Current price: $105.10

✅ PCAR has cleared major resistance at 100-102.

✅ Momentum is positive with price above the 50, 100, and 200-day moving averages.

✅ RSI sits around 66, showing strength without being overbought.

🎯 Targets:

• $110 initial

• $120 intermediate

• $135 long term

💥 Trade of the Week: Bullish Three-Legged Option Strategy

🟢 Stock Entry

• Buy PCAR at $105.10

🛡️ Options Strategy

Buy the June 18 $110/$130 call spread and sell the June 18 $95 put for a $1.40 net debit.

Breakdown:

• Buy June $110 Call: $7.10

• Sell June $130 Call: $1.50

• Sell June $95 Put: $4.20

Risk-Reward:

• Max Risk: Unlimited below $96.40

• Max Reward: $18.60 per share ($1,860 per contract)

• Breakevens: $96.40 and $111.40

• Risk-Reward ratio: around 1 to 13

Conservative Alternative:

• Just buy the call spread for $5.60.

• Max reward: $14.40

• Max risk: $5.60

🛑 Risk Management Tip

• For stock: consider a stop around $98.

• For options: understand the risk tied to the short put and potential assignment.

🚀 Catalysts on the Horizon

1. EPA 2027 pre-buy driving truck orders through 2025-26

2. Freight market recovery improving demand

3. Margins strengthening as tariff impact fades

4. Expected analyst upgrades as the story gains traction

🧠 Final Thoughts

PCAR offers a compelling mix of technical strength, solid fundamentals, and a unique regulatory catalyst. This is the type of setup where moving early can make a meaningful difference.

✅ Buy $PCAR ( ▼ 0.61% )  at $105.10 or better
💸 Execute the three-legged options strategy for a $1.40 debit

We’ll be watching this one closely.

Happy Thanksgiving Everyone!

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