/Genuine%20Parts%20Co_%20phone%20and%20website%20by-%20T_Scneider%20via%20Shutterstock.jpg)
With a market cap of $17.4 billion, Genuine Parts Company (GPC) is a global distributor of automotive and industrial replacement parts, operating through two primary segments: Automotive Parts and Industrial Parts. The Atlanta, Georgia-based company serves a wide range of customers across various industries, offering products and services for both vehicle repair and industrial maintenance.
Shares of the auto parts chain have underperformed the broader market over the past 52 weeks. GPC has declined 9.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 31%. In 2024, shares of GPC are down 9.9%, compared to SPX’s 25.2% gain on a YTD basis.
Focusing more closely, Genuine Parts has also lagged behind the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 29.8% return over the past 52 weeks and a nearly 22% YTD gain.
Shares of Genuine Parts tumbled over 20% on Oct. 22 due to a significant earnings miss in Q3 2024, with adjusted earnings of $1.88 per share. The company reported net sales of around $6 billion, slightly missing the expectation, with the Industrial Parts segment seeing a 1.2% year-over-year decline in sales. Additionally, the company lowered its full-year EPS guidance to $8-$8.20 and reduced its revenue growth forecast to 1%-2%, citing ongoing weakness in Europe and its industrial segment.
For the current fiscal year, ending in December, analysts expect GPC’s EPS to decline 13.3% year-over-year to $8.09. The company's earnings surprise history is mixed. It topped the consensus estimates in two of the last four quarters while missing on two other occasions.
Among the 10 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on three “Strong Buy” ratings and seven “Holds.”
On Oct. 23, UBS downgraded its price target for Genuine Parts to $125 and maintained a “Neutral” rating, citing the company’s Q3 results that missed expectations and a weak outlook for Q4.
As of writing, GPC is trading below the mean price target of $133. The Street-high price target of $160, implies a potential upside of 28.2% from the current price levels.
