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Genuine Parts Co GPC

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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Genuine Parts’ 2021 Is Off to a Good Start, Suggesting Its Long-Term Advantages Remain Strong

Zain Akbari, CFA Equity Analyst

Analyst Note

| Zain Akbari, CFA |

We plan to lift our $104 per share valuation of narrow-moat Genuine Parts by a mid-single-digit percentage, reflecting its solid first-quarter earnings. Recovery in the fleet, heavy vehicle, and Europe markets in the automotive segments, and improvement in the industrial unit, outpaced our expectations and suggest the firm is likely to outperform our prior 2021 targets. However, we attribute the differences to timing as Genuine Parts recovers from worldwide pandemic-related effects, and so our long-term outlook remains (low- to mid-single-digit top-line growth, mid- to high-single-digit adjusted operating margins).

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Company Profile

Business Description

Genuine Parts sells automotive parts (about two-thirds of net sales) and industrial components. The company sells vehicle parts to commercial and retail customers through roughly 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.

Contact
2999 Wildwood Parkway
Atlanta, GA, 30339
T +1 678 934-5000
Sector Consumer Cyclical
Industry Specialty Retail
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 50,000

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