Jefferies Raises Price Target on Genuine Parts (GPC) as NAPA Appears Poised for Growth
Jefferies reiterated a Buy rating on Genuine Parts (NYSE: GPC), and raised the price target to $105.00 (from $100.00), following the company's 4Q earnings report. Given solid demand drivers, company owned, NAPA appears poised for mid-single digit growth in '16 while EBIT margin expansion likely continues. While auto sales declined 2% yr/yr to $1.95B, core auto sales expanded 2.5% yr/yr in local currency. Company-owned NAPA stores comped up 2% driven by regional strength along the Northeast, central and western states partially offset by weakness in the southeast and mountain west regions.
Analyst Bret Jordan commented, "Company owned NAPA stores posted a 2% comp, despite a challenging 7% yr/yr compare and unfavorable weather/FX headwinds. Given solid demand drivers NAPA appears poised for mid-single digit growth in '16 while EBIT margin expansion (+40 bps in '15) likely continues. Although visibility to industrial segment recovery is limited and currency headwinds remain, we believe NAPA outperformance will continue to support the shares."
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Shares of Genuine Parts closed at $89.61 yesterday.