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On Wednesday, Evercore ISI analysts adjusted their outlook on Genuine Parts Company (NYSE:GPC), reducing the price target from $135.00 to $130.00, yet maintaining an Outperform rating. With the stock currently trading at $114.95, analyst targets range from $114 to $155, reflecting mixed sentiment in the market. The adjustment comes in the wake of the company’s first-quarter earnings, which surpassed expectations with an EPS of $1.75, beating both Evercore ISI and Street estimates.According to InvestingPro, which provides comprehensive analysis of over 1,400 US stocks, GPC maintains strong financial metrics with an overall health score of FAIR.
Genuine Parts Company’s recent financial performance indicates that they are effectively dealing with a challenging regulatory and consumer environment by concentrating on controllable aspects and investing for the future. With a solid gross profit margin of 36.3% and revenue growth of 1.7% in the last twelve months, the company demonstrates resilience. The company’s stabilizing comparable trends heading into the second quarter suggest potential improvement in the latter half of the year. However, the analysts at Evercore ISI have expressed a conservative stance, slightly lowering their EPS forecast to $7.60, which falls short of the company’s full-year outlook range of $7.75 to $8.25.
Despite the cautious revision, analysts believe that Genuine Parts Company’s stock offers an attractive risk/reward profile. The new price target of $130 is based on a 15.5 times multiple applied to the projected calendar year 2026 EPS of $8.30. As a prominent player in the Distributors industry, the company has demonstrated strong dividend commitment, having raised its dividend for 37 consecutive years. The analysts highlighted the potential benefits for Genuine Parts’ automotive aftermarket business from tariff-related pricing adjustments and market share gains due to competitor store closures. Although industrial demand may remain soft, Genuine Parts is deemed well-equipped to navigate the market with its value-added services and potential for mergers and acquisitions.
Additionally, the analysts pointed out that the company’s 3.7% dividend yield and the stock’s year-to-date underperformance could provide an opportunity for recovery. With a P/E ratio of 18.9x and strong cash flows sufficient to cover interest payments, the company maintains solid fundamentals. This perspective is supported by the current negative sentiment and subdued investor expectations, which, when paired with the stock’s valuation at approximately 13.5 to 14 times the analysts’ calendar year 2026 EPS, presents a favorable risk/reward scenario. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report.
In other recent news, Genuine Parts Company reported its first-quarter 2025 earnings, exceeding analyst expectations with an earnings per share (EPS) of $1.75, compared to the projected $1.68. The company also surpassed revenue forecasts, reporting $5.87 billion against the expected $5.83 billion, marking a 1.4% year-over-year increase. Despite a 21% decline in EPS from the previous year, the gross margin improved by 120 basis points to 37.1%. Genuine Parts reaffirmed its full-year adjusted EPS guidance range of $7.75 to $8.25, with the midpoint surpassing the current consensus of $7.90. CFRA analyst Garrett Nelson upgraded the company’s stock rating from Hold to Buy, setting a price target of $130, based on a favorable outlook for the Automotive segment and the company’s attractive dividend yield. Genuine Parts is also undergoing global restructuring aimed at achieving $200 million in cost savings by 2026. The company continues to monitor the potential impacts of new U.S. tariffs introduced in the first quarter, which could affect costs and supply chain dynamics.
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