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Genuine Parts Co. Faces Mixed Expectations Ahead of Q3 Earnings

Genuine Parts Company is set to release its Q3 earnings report, with analysts anticipating a slight decline in profit per share. Despite a moderately bullish consensus rating, the company's recent performance indicates challenges, particularly in the industrial sector, that may influence stock prices.

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AI Rating:   4

The report highlights Genuine Parts Company's upcoming Q3 earnings release on October 22, with expectations of earnings per share (EPS) at $2.45, which marks a 1.6% decline from last year's $2.49. This forecast indicates potential challenges in profitability which may impact investor sentiment negatively.

Notably, the company reported adjusted earnings of $2.44 for last quarter, which missed the consensus estimate by 5.8%. This miss combined with expected revenue decline may signal to investors that the company is struggling to maintain its earnings momentum, particularly since there was also mention of weak sales in both the automotive and industrial sectors.

Furthermore, the report notes that Genuine Parts Company's total revenue of $5.96 billion in its last earnings release missed the expectations of $6.04 billion. Such discrepancies in revenue are critical as they may lead to downward adjustments in stock price due to investor reaction to missed estimates. This underperformance is also reflected in their year-to-date stock decline of 1.4% contrasted with S&P 500's 19.5% gains.

In fiscal 2024, an EPS of $9.37 is forecast, which shows a slight improvement from $9.33 in fiscal 2023. While this suggests a positive trend, the marginal increase does not significantly alleviate concerns about current performance pressures and mixed results.

The consensus opinion is moderately bullish, with a rating of “Moderate Buy” among nine analysts. However, given the current challenges highlighted in the report, along with historical performance, stock price reactions might be cautious as investors digest the upcoming earnings results.

Stocks:  GPC