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Valued at a market cap of $16.1 billion, Genuine Parts Company (GPC) distributes automotive replacement parts, as well as industrial parts and materials. The Atlanta, Georgia-based company provides automotive replacement parts for a wide range of vehicles, including hybrid and electric vehicles, trucks, SUVs, and buses, to name a few, and also offers industrial replacement parts and related supplies such as bearings, mechanical and electrical power transmission products, and components.
Companies worth $10 billion or more are generally described as “large-cap” stocks, and Genuine Parts Company fits right into that category. The industrial supplies giant serves its global customers from an extensive network of more than 10,700 locations in 17 countries, supported by over 60,000 employees.
Despite its strengths, the company has declined 29.6% from its 52-week high of $164.45, achieved on Apr. 18. Moreover, it has plunged 15.5% over the past three months, significantly underperforming the broader Consumer Discretionary Select Sector SPDR Fund’s (XLY) 16.4% increase over the same time frame.
Moreover, in the longer term, GPC has declined 15.4% over the past 52 weeks, massively lagging behind XLY’s 28.5% returns. Shares of GPC have fallen 17.3% over the past six months, significantly falling behind XLY’s 25.4% gains over the same time frame.
To confirm its bearish trend, GPC has been trading below its 200-day moving average since early August and has remained below its 50-day moving average since mid-October.
On Oct. 22, GPC’s shares plunged almost 21% following its mixed Q3 earnings release. The company’s revenue of $5.97 billion grew 2.5% annually and slightly surpassed the consensus estimates of $5.94 billion. However, acquisitions fully contributed to this revenue growth, while comparable sales declined marginally. Moreover, Its adjusted EPS fell by a massive 24.5% yearly to $1.88 and missed the forecasted figure by 22.3%.
Continued weakness in market conditions in Europe and its Industrial business led to the company’s disappointing results. GPC also lowered its full-year EPS and revenue guidance, which might have further dampened investor confidence.
GPC’s underperformance becomes more evident when compared to its rival, O’Reilly Automotive, Inc. (ORLY), which gained 28.3% over the past 52 weeks and 14.2% over the past six months.
Despite Genuine Parts Company’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 10 analysts covering it, and the mean price target of $129.67 suggests a 12% premium to its current levels.
