Loop Capital maintains Buy on Genuine Parts stock, target at $155

Published 23/04/2025, 13:32
Loop Capital maintains Buy on Genuine Parts stock, target at $155

Wednesday, Loop Capital analysts maintained a Buy rating and a $155.00 price target on Genuine Parts Company (NYSE:GPC) shares, representing a potential 35% upside from the current price of $114.95. The firm’s analysts highlighted the company’s first-quarter earnings, which slightly surpassed consensus expectations with a 4% beat. This performance was attributed to sales that aligned with projections, strong gross margin execution of 36.3%, and a reduction in interest expenses. According to InvestingPro data, the company maintains robust cash flows that sufficiently cover interest payments.

Genuine Parts Company, despite the looming uncertainty surrounding tariffs, has reaffirmed its guidance for 2025, excluding any potential impact from tariffs. Loop Capital has adjusted its estimates to the lower end of the company’s outlook range. The revision takes into account the anticipation of demand reduction and lower volumes, which are expected to counterbalance the incremental pricing gains in the second half of 2025. Notably, InvestingPro analysis shows the company has maintained dividend payments for 55 consecutive years, with an impressive 8.4% dividend growth in the last twelve months.

The analysts at Loop Capital expressed confidence in Genuine Parts Company’s valuation, considering the stock to be significantly undervalued - a view supported by InvestingPro’s Fair Value analysis. They believe the company is well-positioned to capitalize on renewed inflation. Moreover, the analysts expect that Genuine Parts Company’s ongoing cost optimization efforts and the integration of mergers and acquisitions will contribute to margin expansion as the year progresses into its latter half. The company’s financial health score of 2.45 indicates fair overall condition, with particularly strong scores in profitability (3.47 out of 5).Want deeper insights? Access the comprehensive Pro Research Report for GPC, along with 12+ additional InvestingPro Tips and extensive financial metrics.

In their commentary, Loop Capital analysts stated, "Our revised estimates move to the low-end of the outlook range as we expect demand destruction/lower volumes to offset incremental pricing gains into 2H25. We are reiterating our Buy rating and $155 price target seeing GPC as meaningfully undervalued and well positioned to benefit from renewed inflation, while cost optimization and M&A integration actions support margin expansion into 2H."

Genuine Parts Company’s financial performance and strategic initiatives are closely monitored by investors, as the company navigates through the current economic challenges and opportunities. The backing from Loop Capital with a steady price target and rating underscores a positive outlook for the company’s stock in the market.

In other recent news, Genuine Parts Company has reported its financial results for the first quarter of 2025, exceeding expectations with an earnings per share (EPS) of $1.75, surpassing the forecasted $1.68. The company also reported revenue of $5.87 billion, slightly above the expected $5.83 billion. This performance reflects a year-over-year net sales increase of 1.4%, driven primarily by a 2.5% rise in the Automotive segment, while the Industrial segment saw a slight decline of 0.4%. Evercore ISI analysts adjusted their outlook on Genuine Parts, maintaining an Outperform rating but lowering the price target from $135.00 to $130.00, citing a conservative stance on future earnings. Meanwhile, CFRA upgraded Genuine Parts’ stock rating from Hold to Buy, also setting a price target of $130.00, highlighting the company’s potential benefits from favorable aftermarket trends and its 3.5% dividend yield. Genuine Parts has reaffirmed its full-year adjusted EPS guidance range of $7.75 to $8.25, indicating confidence in its strategic initiatives and ability to navigate market challenges. The company is also undergoing global restructuring efforts to achieve cost savings, aiming for $200 million by 2026.

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