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Genuine Parts Hits 52-Week High: What's Behind the Rally?

Zacks Equity Research

Shares of Genuine Parts Company GPC scaled a fresh 52-week high of $115.20 on Apr 8, before closing the day at $115.14.

The company has a market cap of roughly $16.8 billion. Its expected long-term earnings per share growth rate is pegged at 5.2%, lower than the industry average of 11.4%.

Genuine Parts’ shares gained 21% in the last three months, outperforming the industry’s growth of 17.6%.



 

Driving Factors

Value-added services and frequent investments and acquisitions contributed to rally of the stock.

Value-added services, targeting existing and new customers, are paying off. Also, the company has been able to enhance product offerings and expand geographical footprint through industrial and automotive acquisitions.

In February 2019, it inked a definitive agreement to acquire Axis New England and Axis New York. The new company will be added to Genuine Parts’ Industrial segment, which operates under the name, Motion Industries. The newly added company is projected to contribute $55 million in estimated annual revenues.

In fourth-quarter 2018, Genuine Parts reported net sales of $4.6 billion, up 9% year over year. The figure was almost in line with the Zacks Consensus Estimate. Total sales included 4.6% comparable growth, 6% from acquisitions and 1.2% adverse impact of the foreign currency translation.

Zacks Rank & Stocks to Consider

Genuine Parts currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the auto space are Ferrari N.V. RACE, General Motors Company GM and Fox Factory Holding Corp. FOXF, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ferrari has an expected long-term growth rate of 18.5%. Shares of the company have gained 26.1% over the past three months.

General Motors’ long-term growth rate is projected at 8.9%. Over the past three months, shares of the company have gained 11.9%.

Fox Factory has an expected long-term growth rate of 15.1%. Over the past three months, shares of the company have risen 20%.

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