PACCAR (PCAR) is a "quality" operator with strong cyclical tailwinds but the stock has underperformed the sector since late July despite positive earnings momentum, RBC Capital Markets said in a Thursday research report.

"This creates an attractive entry point for a stock highly geared to the nascent North American recovery," the report said.

Following an analysis of market order data and its profit history, the note said this upcycle has a long way to run and consensus looks too low.

RBC analysts raised their fiscal 2027 and 2028 EPS forecasts by 10% and 18%, respectively.

They upgraded the stock to outperform from sector perform and increased their price target to $150 from $130.

Price: 122.76, Change: +0.88, Percent Change: +0.72