Genuine Parts' Risk/Reward Profile Remains Balanced, UBS Says

MT Newswires Live
8 hours ago

Genuine Parts' (GPC) near-term risk/reward profile is "relatively balanced," as its future standalone automotive and industrial businesses continue to track largely in line with expectations, UBS Securities said.

The company plans to separate its automotive and industrial businesses into two independent, publicly traded companies, targeted for the first quarter of 2027.

Genuine Parts said that in July and August, the automotive business tracked consistently with internal expectations and the pace it established in Q2, according to the Tuesday note.

Meanwhile, improving industrial indicators are providing a positive backdrop for the industrial business, notably with Genuine Parts' planning assumptions not taking into account any benefit from the Purchasing Managers Index, the analysts said.

The planned investor days for the two businesses in early December are likely to become a "meaningful catalyst" as they are expected to give greater clarity around the standalone earnings profiles and valuation frameworks of each, the analysts said. Until then, the analysts said they anticipate the shares to remain largely range-bound without any immediate catalysts.

UBS maintained its $122 price target on the company, with a buy rating.

Genuine Parts shares were down more than 2% in Wednesday afternoon trading.

Price: 124.70, Change: -2.68, Percent Change: -2.10

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