GPC
Genuine Parts Company
$132.57
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 17.1% above fair value
You pay
$132.57
Bear
$99.08
Fair
$113.25
Bull
$127.40
Bear
$99.08
-25.3%
$6.47 × 14x P/E
Fair
$113.25
-14.6%
$6.47 × 16x P/E
Bull
$127.40
-3.9%
$6.47 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
20.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $142.40 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $113.25 per share.
Warnings
The company's reported profits differ from official accounting profits by 1277%. Check what costs are being left out of the adjusted number.
The company pays out 890% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $142.40 (from 22 analysts). Our estimate is 27% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples