We’re Initiating a New Position in a Trucking Play
The intersection of rising utilization levels, a pending EPA emission mandate, and the One Big Beautiful Bill have us making this move.
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After you receive this Alert, we will buy 520 shares of Paccar (PCAR) at or near $115. This is a new position, and PCAR shares post-trade will account for about 1% of the Pro Portfolio’s assets.
| Symbol | Transaction Type | # Shares Traded | Recent Price $ | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
| PCAR | Buy | 520 | 115.04 | 520 | 1.0 |
We are pulling the trigger on the shares of heavy and medium-duty truck company Paccar, calling them up from the Portfolio’s Bullpen. Our play here is the pull forward in truck demand tied to the tougher 2027 NOx engine requirements.
Yesterday, we discussed the following about these requirements, which will be phased in starting with the model truck year of 2027:
This strongly suggests the uptick in heavy-truck orders we’ve seen in recent months is poised to continue as trucking fleets and owner-operators look to avert an incremental cost of around $10,000 per truck. Engine company Cummins (CMI) has shared that it sees an uplift in demand for the heavy-duty truck market in 2H 2026. Engine orders have started to pick up, and by the end of this month, Cummins targets producing 400 heavy-duty truck engines per day, up from 240 to 250 earlier this year.
That points to rising production levels at heavy-duty truck companies, including Paccar.
The comment from Cummins was from the company’s presentation on Tuesday (June 9) at the Wells Fargo Industrials & Materials Conference.
Here’s the thing — the last movement we’ve seen from Wall Street regarding PCAR shares was back in late April. Since that time, the domestic manufacturing economy has picked up as evidenced by both the Manufacturing PMI and Manufacturing PMI data sets published by ISM.
This points to rising demand for the existing truck fleet at a time when the average age of a U.S. Class 8 tractor is around 6.3 years old, the highest in more than a decade. Factor in the looming emission regulation and the 100% bonus depreciation under the One, Big, Beautiful Bill. And, yes, Class 8 trucks can be fully written off in the first year they are placed in service.
That confluence of factors suggests the pull-forward in demand will be strong as will Paccar’s operating leverage. Adding PCAR shares to the Portfolio will allow us to participate in that.
As we make this move, we will establish an initial price target of $135 and a checkpoint of $95. While that berth is a tad wide, it will give us some room to build out the position at lower prices should we see a wider market pullback emerge. With that in mind, we will begin this new position with a Two rating, but will revisit it based on incoming data.
Two items we will want to follow closely will be any action by President Trump to curtail pending EPA regulations and, as we explained yesterday, the announcement of Paccar’s transition from the 2026 model year to 2027.
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(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade’s executed price here. Be sure to toggle the chart to sort by Purchase Date.)
At the time of publication, TheStreet Pro Portfolio was long AVGO and ETN shares.
