Rising car prices good for Genuine

Article Excerpt

GENUINE PARTS CO. $126 is a buy. The company (New York symbol GPC; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 138.8 million; Market cap: $17.5 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.3%; TSINetwork Rating: Average; www.genpt.com) is a leading seller of replacement auto parts. It also distributes industrial products like bearings, pumps and hoses. Genuine’s sales in the three months ended March 31, 2025, rose 1.4%, to $5.87 billion from $5.82 billion a year earlier. If you factor out acquisitions and currency rates, sales fell 0.8%. Higher operating costs also cut its earnings by 21.1%, to $1.75 a share from $2.22. The company is now cutting jobs and consolidating facilities. The plan should save it $200 million annually by 2026. Genuine’s will likely earn $7.75 a share for all of 2025, and the stock trades at 16.3 times that estimate. That’s a reasonable multiple given new tariffs, after the flurry of sales just before their implementation, should encourage more drivers to hold their current vehicles…