What Is Genuine Parts Company's (NYSE:GPC) Share Price Doing?

Genuine Parts Company (NYSE:GPC) received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$180 at one point, and dropping to the lows of US$154. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Genuine Parts' current trading price of US$165 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Genuine Parts’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Genuine Parts

Is Genuine Parts Still Cheap?

According to my valuation model, Genuine Parts seems to be fairly priced at around 5.4% below my intrinsic value, which means if you buy Genuine Parts today, you’d be paying a fair price for it. And if you believe the company’s true value is $174.12, then there’s not much of an upside to gain from mispricing. What's more, Genuine Parts’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Genuine Parts look like?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Genuine Parts' earnings over the next few years are expected to increase by 24%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in GPC’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on GPC, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. You'd be interested to know, that we found 1 warning sign for Genuine Parts and you'll want to know about it.

If you are no longer interested in Genuine Parts, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.