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Genuine Parts (GPC)
:GPC
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Genuine Parts Company
(NYSE:GPC)
71Outperform
Positive Factors
Market Conditions
Expectations for improvements in both segments benefiting from harsh winter weather and higher same SKU inflation for Auto, and higher production activity for Industrial.
Political Influence
A Republican win could benefit both of GPC’s segments with same SKU inflation for Auto and more on-shoring activity for Industrial.
Negative Factors
Financial Performance
Both end markets haven’t recovered as much as anticipated and, when combined with higher-than-expected cost pressures, earnings have now been reset sharply lower for future years.
Market Share
Despite self-help initiatives, GPC seems to be losing market share due to significant deceleration and underperformance relative to leading peers.
Genuine Parts Company (GPC) vs. S&P 500 (SPY)
Market Cap
$17.86B
Dividend Yield3.13%
Average Volume (3M)1.56M
Price to Earnings (P/E)21.1
Beta (1Y)0.63
Revenue Growth1.99%
EPS Growth-32.18%
CountryUS
Employees63,000
SectorConsumer Cyclical
Sector Strength74
IndustrySpecialty Retail
Share Statistics
EPS (TTM)1.75
Shares Outstanding138,789,640
10 Day Avg. Volume1,380,436
30 Day Avg. Volume1,556,403
Financial Highlights & Ratios
PEG Ratio-3.18
Price to Book (P/B)3.64
Price to Sales (P/S)0.00
P/FCF Ratio50.49
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$133.50Price Target Upside3.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Genuine Parts Company Business Overview & Revenue Model
Company DescriptionGenuine Parts Company (GPC) is a global distributor of automotive and industrial replacement parts, operating primarily under the NAPA Auto Parts brand in the automotive sector and Motion Industries in the industrial segment. Founded in 1928 and headquartered in Atlanta, Georgia, GPC serves a diverse customer base, including repair shops, service stations, and industrial operations, by providing top-quality parts and supplies. The company maintains an extensive distribution network across North America, Europe, and Australasia, ensuring timely delivery and access to a wide range of products.
How the Company Makes MoneyGenuine Parts Company generates revenue through its extensive distribution network, primarily by selling automotive and industrial replacement parts. The company's key revenue streams are its Automotive Parts Group, which includes NAPA Auto Parts stores and services, and its Industrial Parts Group, represented by Motion Industries. The Automotive Parts Group serves both retail and wholesale customers, while the Industrial Parts Group caters to maintenance, repair, and operations (MRO) needs of industrial facilities. Significant partnerships with automotive and industrial manufacturers enhance GPC's product offerings and market reach, while investments in technology and logistics capabilities improve operational efficiency and customer service, contributing to its earnings.
Genuine Parts Company Financial Statement Overview
Summary
Genuine Parts Company demonstrates solid revenue growth and stable margins, supported by a manageable balance sheet with increased leverage. While profitability has seen some decline, the company remains in a strong position within the specialty retail industry. The cash flow situation highlights areas for improvement, particularly in enhancing free cash flow generation. Overall, GPC exhibits financial strength with opportunities for optimizing cash efficiency.Income Statement
Genuine Parts Company shows a solid performance in the income statement with a steady revenue growth from $16.5 billion in 2020 to $23.6 billion TTM (Trailing-Twelve-Months). Gross profit margin has remained consistently strong, indicating effective cost management. The net profit margin decreased from 5.72% in 2023 to 3.60% TTM, highlighting a dip in profitability. However, EBITDA margin remains stable at around 7%. Revenue growth has been robust, reflecting strong market presence.85
Very Positive
Balance Sheet
The balance sheet reflects a moderate risk profile with a debt-to-equity ratio that increased to 1.37 TTM from 1.32 in 2024, suggesting higher leverage. The equity ratio stands at 22.45%, indicating a reasonable level of assets financed by equity. Return on equity (ROE) decreased from 20.04% in 2023 to 19.10% TTM, reflecting a dip in profitability relative to equity. Overall, the company maintains a stable financial position with manageable debt levels.75
Positive
Cash Flow
Cash flow analysis indicates challenges in cash generation with a decline in free cash flow from $683.9 million in 2024 to $320.6 million TTM, showing a negative growth trend. The operating cash flow to net income ratio decreased to 1.05 TTM from 1.38 in 2024, suggesting less efficiency in converting income to cash. Despite these challenges, the company maintains positive cash flows, indicating resilience amidst fluctuating cash performance.70
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 23.57B | 23.49B | 23.09B | 22.10B | 18.87B | 16.54B | Gross Profit |
| 8.52B | 8.52B | 8.29B | 7.74B | 6.63B | 5.65B | EBIT |
| 1.27B | 1.23B | 1.75B | 1.65B | 1.26B | 1.03B | EBITDA |
| 1.65B | 1.68B | 2.16B | 1.99B | 1.55B | 1.27B | Net Income Common Stockholders |
| 849.57M | 904.08M | 1.32B | 1.18B | 898.79M | 163.40M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 420.45M | 479.99M | 1.10B | 653.46M | 714.70M | 990.17M | Total Assets |
| 19.82B | 19.28B | 17.97B | 16.50B | 14.35B | 13.44B | Total Debt |
| 6.10B | 5.74B | 4.89B | 4.16B | 3.20B | 3.47B | Net Debt |
| 5.68B | 5.26B | 3.78B | 3.51B | 2.48B | 2.48B | Total Liabilities |
| 15.35B | 14.93B | 13.55B | 12.69B | 10.85B | 10.22B | Stockholders Equity |
| 4.45B | 4.34B | 4.40B | 3.79B | 3.49B | 3.20B |
| Cash Flow | Free Cash Flow | ||||
| 320.63M | 683.91M | 922.93M | 1.13B | 992.15M | 1.87B | Operating Cash Flow |
| 892.12M | 1.25B | 1.44B | 1.47B | 1.26B | 2.02B | Investing Cash Flow |
| -1.48B | -1.51B | -705.79M | -1.68B | -506.16M | 171.64M | Financing Cash Flow |
| -29.97M | -333.94M | -292.16M | 205.10M | -989.53M | -1.51B |
Genuine Parts Company Technical Analysis
Positive
128.67
Price Trends
118.72
Positive
118.52
Positive
123.93
Positive
Market Momentum
2.22
Negative
68.61
Neutral
95.46
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GPC, the sentiment is Positive. The current price of 128.67 is above the 20-day moving average (MA) of 118.88, above the 50-day MA of 118.72, and above the 200-day MA of 123.93, indicating a bullish trend. The MACD of 2.22 indicates Negative momentum. The RSI at 68.61 is Neutral, neither overbought nor oversold. The STOCH value of 95.46 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GPC.
Genuine Parts Company Risk Analysis
Genuine Parts Company disclosed 17 risk factors in its most recent earnings report. Genuine Parts Company reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Genuine Parts Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $78.74B | 33.86 | -174.09% | ― | 4.90% | 3.28% | |
71 Outperform | $17.86B | 21.13 | 19.19% | 3.13% | 1.99% | -32.18% | |
70 Outperform | $63.34B | 25.40 | -14.95% | ― | 4.72% | 4.69% | |
66 Neutral | $9.04B | 19.29 | 65.24% | 0.41% | -6.43% | -0.81% | |
61 Neutral | $6.98B | 11.35 | 2.88% | 3.90% | 2.65% | -21.84% | |
46 Neutral | $2.10B | 59.62 | -23.45% | 2.85% | -9.34% | -852.37% | |
46 Neutral | $46.37M | ― | -54.32% | ― | -14.49% | -210.54% |
* Consumer Cyclical Sector Average
Performance Comparison
GPC
Genuine Parts Company
128.67
-18.69
-12.68%
AAP
Advance Auto Parts
35.03
-35.89
-50.61%
AZO
AutoZone
3,786.42
862.38
29.49%
MUSA
Murphy USA
457.52
15.39
3.48%
ORLY
O'Reilly Auto
1,381.66
386.33
38.81%
PRTS
US Auto Parts Network
0.79
-0.27
-25.47%
Genuine Parts Company Earnings Call Summary
Earnings Call Date:Apr 22, 2025
(Q1-2025)
| % Change Since: 15.07%|
Next Earnings Date:Jul 17, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with some positive developments such as overall sales growth, gross margin expansion, and strong performance in the Asia Pacific and Canadian markets. However, these were offset by declines in adjusted EPS, pressure in the global automotive segment, and challenges in the industrial segment. Additionally, there was a notable decline in free cash flow.Q1-2025 Updates
Positive Updates
Total GPC Sales Growth
GPC reported total sales of $5.9 billion, up 1.4% from the previous year, driven primarily by acquisitions and improved sales in the industrial business.
Gross Margin Expansion
Gross margin expanded by 120 basis points from the previous year, reflecting benefits from acquisitions and strategic pricing and sourcing initiatives.
NAPA ProLink Platform
The modernized e-commerce platform, NAPA ProLink, was launched and is receiving positive customer feedback, with B2B e-sales growing mid-single-digits.
Expansion in Asia Pacific
Asia Pacific region delivered another quarter of double-digit growth in local currency, with total sales increasing approximately 12%.
Canadian Sales Increase
In Canada, total sales increased approximately 5% in local currency from the previous year, with comparable sales up approximately 4%.
Strategic Acquisitions
The integration of recent acquisitions, including MPEC and Walker, is progressing well and contributing positively to NAPA's EBITDA margin.
Negative Updates
Decline in Adjusted EPS
Adjusted EPS for the first quarter was $1.75, down 21% from the prior year, due to one less selling day, lower pension income, higher depreciation and interest expense, and foreign currency headwinds.
Global Automotive Segment Pressure
Global Automotive segment EBITDA decreased by 110 basis points from the previous year due to softer organic sales in the U.S. and Europe and one less selling day.
U.S. Automotive Comparable Sales Decline
U.S. comparable sales declined approximately 3%, impacted by one less selling day and softer market conditions.
Industrial Segment Challenges
Global industrial sales remained flat, with comparable sales decreasing less than 1%, affected by sluggish market conditions and the one less selling day.
Free Cash Flow Decline
Free cash flow was down approximately $160 million, with investments in inventory and acquisitions creating timing headwinds in working capital.
Company Guidance
During the Genuine Parts Company's First Quarter 2025 earnings call, a comprehensive financial overview and future outlook were provided. The company reported total sales of $5.9 billion, a 1.4% increase from the previous year, primarily driven by acquisitions and improvements in the industrial segment, despite facing a 110 basis point negative impact due to one less selling day. Gross margin expanded by 120 basis points, attributed to strategic pricing and sourcing initiatives. Segment-wise, global industrial sales remained flat at $2.2 billion, while the global automotive segment saw a 2.5% sales increase. The company maintained its 2025 outlook, predicting total sales growth between 2% and 4% and adjusted EPS in the range of $7.75 to $8.25. Challenges such as tariffs, inflation, and geopolitical factors were acknowledged, but the company emphasized its strategic initiatives, including a modernized e-commerce platform, to navigate these uncertainties.Genuine Parts Company Corporate Events
Executive/Board ChangesShareholder MeetingsDividends
Genuine Parts Company Elects New Director at Shareholder Meeting
Neutral
Apr 29, 2025
Genuine Parts Company announced the election of Ms. Laurie Schupmann as a new director following the retirement of four board members at the 2025 Annual Meeting of Shareholders held on April 28, 2025. The meeting also saw the approval of executive compensation, amendments to the company’s articles of incorporation, and the ratification of Ernst & Young LLP as auditors, while a proposal on diversity efforts was rejected. Additionally, the board declared a regular quarterly cash dividend of $1.03 per share, payable on July 2, 2025.
Spark’s Take on GPC Stock
According to Spark, TipRanks’ AI Analyst, GPC is a Outperform.
Genuine Parts Company demonstrates solid financial performance and stability, with consistent revenue growth and strategic initiatives that position it well for future opportunities. However, challenges in profitability and cash flow generation, along with mixed technical indicators, moderate the overall outlook. Fair valuation and a healthy dividend yield provide some balance, supporting a moderately positive stock assessment.
To see Spark’s full report on GPC stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.