PACCAR (PCAR) has extended its forecast for a positive shift in margins and demand to Q3, prompting the firm to consider the risk/reward profile as balanced, UBS Securities said in a note Wednesday.

The firm recognized potential risks, such as the chance that PACCAR may be overestimating recovery in the truck market for later this year, and that the resolution of trade and other policies could be delayed until 2026.

UBS said it balanced these growing concerns with possible positive factors, such as the effects of economic stimulus, bonus depreciation possibly encouraging fleet replacement purchases, and the chance that the Section 232 trade case could lead to a positive margin shift.

Reflecting slightly better volumes and less margin pressure than previously expected, the company raised its 2025 earnings guidance to $5.30 from $4.90 per share and for 2026, it raised it to $6.25 from $5.80 previously. Analysts surveyed by FactSet expect $5.50 for 2025 and $6.45 for 2026.

The firm upgraded PACCAR to neutral from sell and raised its price target to $100 from $81.

Shares of PACCAR were up more than 1% in recent trading Wednesday.

Price: 100.18, Change: +1.60, Percent Change: +1.62