Genuine Parts (GPC) Stock Forecast & Price Target

Genuine Parts is positioned to benefit from improving U.S. trends in the second half of the year, driven by tariff-related SKU inflation and rising repair and maintenance activity due to higher new and used car prices. The company has reported strong growth with its MRO customers and an increase in industrial EBITDA margins, indicating improved operational efficiency and earnings leverage. Additionally, Genuine Parts is expected to gain further advantages as it shifts toward a higher mix of company-owned stores, enhancing its control over offerings amid an anticipated increase in demand.

Genuine Parts has experienced a decline in its Auto EBITDA margins, dropping approximately 110 basis points year-over-year to 8.6% in the second quarter, which is attributed to rising labor, rent, and supply chain costs. Additionally, the company has revised its Auto EBITDA margin guidance for 2025 to flat/slightly down from a previously higher forecast, indicating potential ongoing operational challenges. Furthermore, the industrial segment reported a marginal decline in comparable sales of 0.1%, suggesting a lack of momentum and increased uncertainty that could hinder future growth prospects.