Genuine Parts Co. (GPC) saw a 15% increase in profit to $0.86 per share in the fourth quarter of 2011, surpassing the Zacks Consensus Estimate by $0.03. Meanwhile, total sales increased 7% to $3.0 billion, which was in line with the Zacks Consensus Estimate. For full year 2011, the company reported a 19% increase in profit to $565 million or $3.59 per share, beating the Zacks Consensus Estimate by $0.02.
Genuine Parts is a leading distributor of automotive and industrial replacement parts, office products and electrical/electronic materials in the U.S., Canada and Mexico. The company has undertaken various initiatives to boost sales and earnings, such as product line expansion, penetration into new markets and acquisitions.
Therefore, we are maintaining our Outperform recommendation on the stock with a target price of $77.00. This target price, 19.5x our 2012 EPS estimate, reflects our Outperform recommendation.
