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Valued at a market cap of $19.8 billion, Genuine Parts Company (GPC) operates in the automotive and industrial replacement parts sector. Based in Atlanta, Georgia, the company distributes a wide range of parts and materials, including those for hybrid and electric vehicles, as well as industrial components and related services.
Shares of the auto and industrial parts distributor have lagged behind the broader market over the past 52 weeks. GPC has declined 7.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 27%. In 2024, shares of GPC are up 2.7%, compared to SPX's 18.1% gain on a YTD basis.
Zooming in further, GPC is also underperforming the Nasdaq Transportation ETF's (FTXR) 7.6% gain over the past 52 weeks and a 3.9% increase on a YTD basis.
Genuine Parts has underperformed due to weak consumer demand from high interest rates and persistent inflation, compounded by softness in European markets and ongoing headwinds in the automotive and industrial sectors. Moreover, the stock dropped more than 1% after its Q2 earnings release on Jul. 23 due to missing both revenue and EPS expectations. Additionally, the company reported flat same-store sales growth and lowered its full-year earnings forecast, contributing to a decline in the stock.
For the current fiscal year, ending in December, analysts expect GPC's EPS to grow marginally year over year to $9.37. The company's earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on one another occasion.
Among the nine analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on three “Strong Buy” ratings and six “Holds.”
On Jul. 24, Evercore ISI's Greg Melich removed Genuine Parts from the "Tactical Underperform" list, lowering the price target to $148 while keeping an "In Line" rating due to challenges in navigating a difficult automotive and industrial environment amid wage inflation.
The mean price target of $154.88 represents a premium of just 8.9% to GPC's current levels. The Street-high price target of $165 implies a modest potential upside of 16% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
