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PCAR vs. NAV: Navistar Doesn’t Look Cheap

  • Adjusted EV:  Below, we update our table comparing Navistar and Paccar on an adjusted EV/EBITDA basis (2013 Consensus) and again find that Navistar is actually more expensive than Paccar.  While we generally do not rely on multiples for valuation, the comparison is telling.
  • Operational Risks:  Navistar has numerous operating and management challenges ahead that will bring tremendous operating risks.  Why pay more for Navistar than Paccar? 
  • Downside Risk Significant:  If Navistar cannot pull off a rapid and challenging switch in engine emissions technology, the shares could easily end up in the single digits.  That still doesn’t seem like a risk worth taking to us, even with the shares down 43.4% YTD.

Industrial Indicator: PCAR vs. NAV: Navistar Doesn’t Look Cheap - pcar vs nav

UPCOMING EVENT:  We will be hosting a call on our Truck OEM Industry Black Book on August 16th at 11am. Details to follow.

Industrial Indicator: PCAR vs. NAV: Navistar Doesn’t Look Cheap - perf 8212