Genuine Parts is a distributor of automotive replacement parts and accessories in the U.S., Canada, Mexico and Australasia. The Company also distributes industrial replacement parts in the U.S., Canada and Mexico through its Motion Industries subsidiary. The company was founded in 1928 and is based in Atlanta, Georgia.
GPC Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Genuine Parts Co with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Genuine Parts Co ranked in the 52th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 3.5% on a DCF basis. The most interesting components of our discounted cash flow analysis for Genuine Parts Co ended up being:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 80. Notably, its equity weight is greater than 65.61% of US equities in the Consumer Cyclical sector yielding a positive free cash flow.
Genuine Parts Co's effective tax rate, as measured by taxes paid relative to net income, is at 70 -- greater than 95.99% of US stocks with positive free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Cyclical that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as GPC, try CMLS, CMPR, HD, HMTV, and SGMS.
Genuine Parts Company (NYSE: GPC) announced today that its Board of Directors has appointed William P. Stengel to the position of President of Genuine Parts Company. Mr. Stengel, 43, was previously Executive Vice President and Chief Transformation Officer of the Company and becomes only the eighth President in the Company's 93-year history. He will continue to report to Paul Donahue, Chairman and Chief Executive Officer.
From the new COVID-19 variant to runoff elections in Georgia, things are looking bleak for stocks. Thus, invest in dividend aristocrats like Procter & Gamble (PG) and T. Rowe Price (TROW) for steady returns.