Genuine Parts Earnings: Industrial Unit Propels Solid Start to 2023 Despite U.S. Auto Parts Softness

Our $154 per share valuation of narrow-moat Genuine Parts should rise by a low-single-digit percentage as its industrial unit posted strong comparable sales (12% increase) that helped offset a lackluster start to the year in its domestic automotive operation (low-single-digit increase). With the automotive segment affected by transitory factors such as weather and difficult comparisons and the industrial unit performing in line with our long-term targets, we still forecast mid-single-digit top-line growth rates and high-single-digit operating margins over the next decade, on average. We suggest investors seek a more attractive entry point.