GPC
Genuine Parts Company
$127.24
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 22.9% above fair value
You pay
$127.24
Bear
$90.58
Fair
$103.53
Bull
$116.47
Bear
$90.58
-28.8%
$6.47 × 14x P/E
Fair
$103.53
-18.6%
$6.47 × 16x P/E
Bull
$116.47
-8.5%
$6.47 × 18x P/E
Adjust Assumptions
16.0x
6.47$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
19.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (23 analysts)
$145.75
Divergence from AlphaVal
29%
Summary
Applying a 16x P/E to adjusted EPS of $6.47, the base-case value is $103.53 per share. DDM cross-check: $104.23.
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 897% 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 $145.75 (from 23 analysts). Our estimate is 29% 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