Goldman Sachs analyst Kate McShane maintained a Hold rating on Genuine Parts Company (GPC – Research Report) on February 15 and set a price target of $160.00.
Kate McShane has given her Hold rating due to a combination of factors which include the Genuine Parts Company’s (GPC) mixed fourth-quarter results and their strategic initiatives for the upcoming fiscal year. GPC’s earnings per share (EPS) outperformed Goldman Sachs’ expectations, largely due to better-than-anticipated margins. Despite this, overall sales did not meet projections, and GPC’s U.S. automotive segment experienced a notable decline in comparable sales. McShane attributes this shortfall to challenging year-over-year comparisons and less favorable weather conditions, which impacted December sales.
The Neutral stance is also influenced by management’s proactive measures to address the underperformance in the U.S. automotive business, such as the decision to increase ownership of company-owned stores and the introduction of a global restructuring plan aimed at reducing costs and enhancing efficiency. Although there are signs of improvement with positive trends in January, McShane awaits more consistent evidence of recovery in automotive sales and market share stabilization. Additionally, the introduction of fiscal year 2024 guidance with an expected slower EPS growth rate compared to consensus forecasts adds to the cautious approach, prompting the Hold recommendation on the stock.
In another report released on February 16, Wedbush also maintained a Hold rating on the stock with a $140.00 price target.
GPC’s price has also changed slightly for the past six months – from $154.780 to $143.710, which is a -7.15% drop .
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Genuine Parts Company (GPC) Company Description:
Genuine Parts Co. engages in the distribution of automotive replacement parts, industrial replacement parts, office products and electrical/electronic materials. It operates through the following segments: Automotive, Industrial, Office Products, and Electrical/Electronic Materials. The Automotive segment distributes replacement parts, other than body parts for substantially all makes and models of automobiles, trucks, and other vehicles. The Industrial segment distributes a wide variety of industrial bearings, mechanical and fluid power transmission equipment, including hydraulic and pneumatic products, material handling components, and related parts and supplies. The Office products segment distributes a wide variety of office products, computer supplies, office furniture, and business electronics. The Electrical/Electronic Materials segment distributes a wide variety of electrical/electronic materials, including insulating and conductive materials for use in electronic and electrical apparatus. The company was founded by Carlyle Fraser on May 7, 1928 and is headquartered in Atlanta, GA.
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