Key Points:
- GPC reduced its full-year sales growth forecast from 3-5% to 1-3% due to “softer-than-expected market conditions” caused by high interest rates and living costs.
- Analysts expect GPC to see higher sales growth next quarter and increased free cash flow.
- $GPC was down 1.1% for the day after earnings, reporting a 1.2% revenue miss and an adjusted EPS miss of 5.7%.
View GPC’s full Q2 earnings results >>>
GPC’s Earnings Results:
Genuine Parts Company lowered its full-year outlook due to decreased sales growth expectations, which were exacerbated by high interest rates and higher living costs.
Newly appointed CEO Will Stengel said the results reflected “softer-than-expected market conditions.”
GPC now expects 1-3% sales growth for 2024 instead of the previous 3-5% forecast.
GPC’s second-quarter sales missed analysts’ estimates by 1.2%, reaching $5.96 billion.
What were GPC’s earnings results by segment?
Genuine Part’s Automotive Parts revenue grew 2.0% year-over-year for the quarter.
Management now expects Automotive Parts revenue to grow 1-3% for the full year, down slightly from previous guidance of 2-4%.
GPC’s Industrial Parts segment saw revenue fall 1.1% year-over-year in the second quarter.
The company’s Industrial Parts segment has faced challenges due to a slow recovery in US sales and an uncertain demand environment.
View GPC’s full segment earnings results >>>
What are GPC’s expected earnings results for next quarter?
Will GPC be able to tune up its sales growth?
Wall Street expects Genuine Parts to see slightly higher sales growth next quarter.
We aggregate where the analysts on Wall Street think a stock is heading.
Then we share the consensus estimates, roughly the average of these estimates.
GPC has coverage from 9 Wall Street sell-side analysts, which gives these estimates a strong trustworthiness.
Q3 Expected Results:
- Expected Revenue: $6.0B (up 2.6% from Q3 2023)
- Expected Operating Margins: 7.9% (down 40 basis points from Q3 2023)
- Expected Normalized EPS: $2.45 (down 1.5% from Q3 2023)
- Expected Free Cash Flow: $675M (up 11.3% from Q3 2023)
View GPC’s full Q3 earnings expectations >>>
Is GPC a good stock to buy?
Do analysts expect GPC to turbocharge its business in the next few years?
We’ve aggregated Wall Street’s 5-year estimates for Genuine Parts Company.
It’s important to take analysts’ estimates with a grain of salt because it’s tough for anyone, even investment professionals, to accurately forecast a company’s future performance.
Investment analysts get company forecasts wrong, just like professional meteorologists still get the weather forecast wrong.
Here are GPC’s consensus analyst estimates for the next 5 years:
Notable 5-Year Estimates:
- Expected Revenue CAGR: 3.5%
- Expected Operating CAGR: 3.7%
- Expected Normalized Net Income CAGR: 3.5%
- Expected Free Cash Flow CAGR: 10.6%
See GPC’s full 5-year Analyst Estimates >>>
In addition to the 5-year forecasts, we also like to check the 3-year forecasts.
There’s more uncertainty the farther out you forecast a company’s results, so sometimes you can trust 3-year estimates more than 5-year estimates:
Notable 3-Year Estimates:
- Expected Revenue CAGR: 3.6%
- Expected Operating CAGR: 4.6%
- Expected Normalized Net Income CAGR: 4.1%
- Expected Free Cash Flow CAGR: 9.6%
Final Thoughts:
GPC saw a slight revenue miss for its earnings results this quarter, and management decreased revenue estimates for the year due to a challenging macro environment.
However, analysts expect the company to be able to grow revenues at over 3% CAGR for the next 3+ years.
There’s a whole world of promising companies.
And some are revving up even faster than Genuine Parts Company!
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. We aim to provide informative and engaging analysis to help empower individuals to make their own investment decisions. Neither TIKR nor our authors hold positions in any of the stocks mentioned in this article. Thank you for reading, and happy investing!
