How Will Genuine Parts (GPC) Stock React To This Analyst Action?

NEW YORK (TheStreet) -- Shares of Genuine Parts Co.  (GPC) are lower by -0.92% to $86.99 in early market trading after the company's rating was cut to "neutral" from "buy" at SunTrust Robinson Humphrey (STI) this morning.

Analysts at the firm lowered its target price to $92 from $100. 

Separately, TheStreet Ratings team rates GENUINE PARTS CO as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

"We rate GENUINE PARTS CO (GPC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 6.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • GPC's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that GPC's debt-to-equity ratio is low, the quick ratio, which is currently 0.59, displays a potential problem in covering short-term cash needs.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • GENUINE PARTS CO's earnings per share declined by 7.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENUINE PARTS CO increased its bottom line by earning $4.41 versus $4.15 in the prior year. This year, the market expects an improvement in earnings ($4.59 versus $4.41).
  • You can view the full analysis from the report here: GPC Ratings Report

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE.

If you liked this article you might like

GM's Cautious Tone Sets Auto Parts Stocks Rising

Advanced Trade: Advance Auto Parts

Three Auto Parts Stocks Ready to Put the Pedal to the Metal

Jim Cramer -- Genuine Parts Doesn't Get Enough Credit

Market Recon: The Banks Trade Will Become a Yield Curve Watch