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Product Offerings Aid Genuine Parts (GPC) Amid Expense Woes

Zacks Equity Research

On Jun 25, we issued an updated research report on Genuine Parts Company GPC.

The company resorts to acquisition in order to improve its product offerings and solidify its global platform. This, in turn, helps it attain robust and sustainable sales growth. In May 2019, the company announced to acquire the outstanding 65% stake in Sydney, Australia-based Inenco Group (‘Inenco’). After completing the acquisition, Genuine Parts will have 100% ownership in Inenco. In first-quarter 2019, Genuine Parts acquired Axis New England and Axis New York, and these were added to the Industrial Parts Group.

In first-quarter 2019, the company reported net sales of $4.74 billion, up 3.3% year over year. Net sales included 3.3% comparable growth, roughly 2% from acquisitions, partly offset by 2% adverse impact of foreign currency translation.

However, Genuine Parts has been witnessing continuous rise in selling, general & administrative (SG&A) expenses that might hamper the gross margin. Further, unfavorable foreign currency translation also added to the company’s woes that reduced quarterly earnings.

Over the past year, shares of Genuine Parts have outperformed the industry it belongs to. During this time frame, shares of the company have rallied 12.4% while the industry rose 0.6%.


 

Zacks Rank & Stocks to Consider

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

A few better-ranked stocks in the auto space are Ford Motor Company F, Fox Factory Holding Corp. FOXF and Cummins Inc. CMI, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ford has an expected long-term growth rate of 7.3%. Over the past six months, shares of the company have gained 25.3%.

Fox Factory has an expected long-term growth rate of 16.4%. Over the past six months, shares of the company have gained 35.1%.

Cummins has an expected long-term growth rate of 8%. Over the past six months, shares of the company have gained 27.3%.

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Ford Motor Company (F) : Free Stock Analysis Report
 
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