PACCAR (PCAR) is set to recover profitability this year, due to a recovery in Class 8 truck demand in North America, diminishing tariff pressures, and a potential pricing improvement, RBC Capital Markets said in a Tuesday note.

Class 8 truck orders have posted year-over-year increases for three straight months from December, and the firm does not consider pre-buy activity to be a major driver in demand, the report said following a roadshow with PACCAR's senior director of investor relations Ken Hastings.

While noting that freight customers remain under pressure, Hastings sees conditions in place for continued growth as rates improve and the worst of the excess supply in the market is corrected, the note said.

"If pre-buy activity does indeed come in H2, it could see demand at the upper end of PACCAR's 230k-270k forecast," it said.

RBC maintained its sector-perform rating due to valuation.

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