Earnings Update: Genuine Parts Company (NYSE:GPC) Just Reported Its Yearly Results And Analysts Are Updating Their Forecasts

Genuine Parts Company (NYSE:GPC) last week reported its latest full-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results were roughly in line with estimates, with revenues of US$23b and statutory earnings per share of US$9.33. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Genuine Parts

Following the latest results, Genuine Parts' 13 analysts are now forecasting revenues of US$23.9b in 2024. This would be a credible 3.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 3.1% to US$9.72. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$24.1b and earnings per share (EPS) of US$9.88 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$156. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Genuine Parts analyst has a price target of US$187 per share, while the most pessimistic values it at US$140. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Genuine Parts' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.4% growth on an annualised basis. This is compared to a historical growth rate of 6.9% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.7% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Genuine Parts.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Genuine Parts going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 1 warning sign for Genuine Parts you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.