PACCAR Is Down 11% in 25 Days. What History Says Now

PACCAR Is Down 11% in 25 Days. What History Says

PACCAR Inc (PCAR) is down 11% from its all-time high as of September 1, 2026, and has been falling for approximately 25 days. The Drawdown Severity Score™ stands at 2.2, placing it in the yellow zone with a Moderately Elevated severity level. In 36 comparable prior drops of this depth, PACCAR Inc took an average of 334 days to recover.

Understanding the Current Drawdown Severity Score™

Our proprietary Drawdown Severity Score™ provides a quantitative framework to evaluate the historical importance of a stock's decline relative to its own trading history. As of September 1, 2026, the Drawdown Severity Score™ for PACCAR Inc is 2.2, which places the current price action within the yellow zone as Moderately Elevated. This transition from the green zone indicates that the current pullback has surpassed routine market noise and is beginning to show characteristics of a more prolonged correction.

To understand the historical context of this shift, we must look at the broader historical footprint of PACCAR Inc. Over its trading history, we have recorded 231 total historical drawdown events. A drawdown event is defined as any period where the stock price falls below its previous peak and remains below that level until it successfully reclaims its all-time high. Across all 231 historical events, the average maximum drawdown was -5.5%, and the average drawdown duration was 61 days.

The current drawdown of -11.4% has lasted 25 days, meaning the depth of the current drop is already more than double the historical average depth. However, the duration of 25 days is still well below the historical average of 61 days for all drawdowns. This combination of a deeper-than-average drop in a shorter-than-average timeframe is what drives the current Moderately Elevated severity score. It signals a rapid acceleration in selling pressure that deviates from the stock's typical minor pullback patterns.

Valuation Versus Its Own Record

A key differentiator in our drawdown analysis is contrasting the physical price decline with the asset's underlying valuation multiples. Even though the stock price has fallen by -11.4% from its all-time high, the current valuation multiples remain exceptionally high relative to the company's own historical record. As of the valuation snapshot date of 2026-09-01, PACCAR Inc's Price-to-Sales (P/S) ratio is 2.4. This multiple sits in the 99th percentile of its own daily P/S record since 2006-09-01, meaning that for 99% of the trading days over the last two decades, the stock traded at a lower multiple than it does today. The historical median P/S ratio for PACCAR Inc over this period is 1.3.

A similar pattern emerges when examining the Enterprise Value-to-EBITDA (EV/EBITDA) ratio. As of 2026-09-01, the EV/EBITDA ratio stands at 21.0, placing it in the 94th percentile of its daily historical record since 2006-09-01. This is more than double the stock's historical median EV/EBITDA ratio of 10.4.

This divergence between a falling stock price and highly elevated valuation percentiles is a critical historical fact. It shows that despite the -11.4% price reduction, the multiples have not contracted to levels that would historically be considered low or even average for this specific asset. A high percentile indicates that the stock remains highly valued compared to its own past, even during this pullback. We present these metrics strictly as historical context to help investors understand where the current multiples sit within the company's own trading history, and they should not be interpreted as an investment recommendation or a buy/sell signal.

Historical Comparison of 10% Pullbacks

To put the current -11.4% drawdown into perspective, we must examine how PACCAR Inc has behaved during similar double-digit declines. Since 2006, the stock has experienced a drawdown of 10% or more exactly 36 times. When the stock crosses this 10% threshold, the dynamics of the decline and subsequent recovery change dramatically compared to the average minor pullback.

While the average of all 231 historical drawdown events is resolved in 61 days, the average duration of comparable drops of 10% or more is 334 days. This indicates that once the stock enters a double-digit correction, it historically takes nearly a year on average to work through the decline and fully reclaim its previous all-time high.

The table below compares the current drawdown metrics against these historical baselines:

This historical data shows that double-digit drawdowns for PACCAR Inc are relatively frequent, occurring 36 times over the past 20 years. However, the recovery process is often a multi-month endeavor. The current duration of 25 days represents only a small fraction of the 334-day average historical recovery period for comparable drops.

What is Driving the Sell-Off?

To understand the fundamental context surrounding this price action, we can look at recent corporate developments and market sentiment. PACCAR Inc, a global leader in the design and manufacture of premium light, medium, and heavy-duty trucks under the Kenworth, Peterbilt, and DAF nameplates, has recently reported strong financial performance, yet its stock has faced headwinds.

According to a report by Yahoo Finance, some market analysts have suggested that PACCAR Inc could be 11% undervalued following its Q2 2026 earnings beat. This perspective is supported by simplywall.st, which raised the question of whether the stock is undervalued on its Q2 earnings beat, noting the company's robust operational execution. These reports suggest that from an earnings perspective, the company continues to deliver solid results.

However, institutional activity has shown signs of caution. MarketBeat reported that Ancora Advisors LLC recently cut its stock position in PACCAR Inc., indicating that some institutional investors may be reducing their exposure to the commercial vehicle manufacturer. This institutional selling could be contributing to the downward pressure on the stock price, leading to the current 25-day decline from its peak of $138.21 to the current price of $122.45.

The contrast between strong earnings beats and institutional selling, combined with historically elevated valuation multiples, highlights the complex environment in which this drawdown is occurring. While the operational performance remains strong, market participants are grappling with high historical valuations and shifting institutional positioning.

Key Metrics and Thresholds to Watch

As this drawdown progresses, investors tracking PACCAR Inc can monitor several critical metrics to gauge whether the correction is stabilizing or deepening.

First, monitor the Drawdown Severity Score™ thresholds. The current score of 2.2 represents a Moderately Elevated level within the yellow zone. If the price continues to slide below $122.45, the severity score will likely rise. A move into the red zone would indicate that the sell-off is reaching levels that are historically less frequent and more severe, potentially aligning with some of the longer-lasting corrections in the stock's history.

Second, watch the valuation percentiles in future data updates. As of September 1, 2026, the P/S ratio is in the 99th percentile and the EV/EBITDA ratio is in the 94th percentile of their respective historical daily records. Tracking whether these percentiles begin to contract toward their historical medians of 1.3 for P/S and 10.4 for EV/EBITDA will provide important structural context. A contraction in these percentiles would indicate that the stock's valuation is returning to its historical norms, which has historically occurred during extended recovery periods.

Finally, pay attention to the duration of the drawdown. The current duration of 25 days is still early in the context of the 334-day average duration for comparable 10% drops. Monitoring whether the stock can establish a bottom and begin a recovery trend before reaching this historical average duration will be a key indicator of market strength.