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Genuine Parts Co GPC

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Morningstar’s Analysis

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Solid End to 2020, Lackluster 2021 Guidance Do Not Alter Our Long-Term View of Genuine Parts

Zain Akbari, CFA Equity Analyst

Analyst Note

| Zain Akbari, CFA |

Our $95 per share valuation of narrow-moat Genuine Parts should not change much after the company posted stronger-than-expected fourth-quarter earnings offset by soft 2021 guidance. With the deviations from our targets reflecting transitory pandemic-related factors, our long-term outlook is intact (low- to mid-single-digit top-line growth, mid- to high-single-digit adjusted operating margins). We suggest investors await a greater margin of safety.

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Company Profile

Business Description

Genuine Parts sells automotive parts (67% of pro-forma net sales) and industrial components. The company sells vehicle parts to commercial and retail customers through over 9,800 stores worldwide, most of which are independently owned. Its industrial unit, primarily operating under the Motion Industries banner in the United States, supplies bearings, power transmission, industrial automation, hydraulic, and pneumatic components to maintenance, repair, and OEM clients.

2999 Wildwood Parkway
Atlanta, GA, 30339
T +1 678 934-5000
Sector Consumer Cyclical
Industry Specialty Retail
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 50,000