Intrinsic value of Genuine Parts - GPC

Previous Close

$82.25

  Intrinsic Value

$93.70

stock screener

  Rating & Target

hold

+14%

  Value-price divergence*

+15%

Previous close

$82.25

 
Intrinsic value

$93.70

 
Up/down potential

+14%

 
Rating

hold

 
Value-price divergence*

+15%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of GPC stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 12.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  0.39
  5.10
  5.09
  5.08
  5.07
  5.07
  5.06
  5.05
  5.05
  5.04
  5.04
  5.03
  5.03
  5.03
  5.03
  5.02
  5.02
  5.02
  5.02
  5.02
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.00
Revenue, $m
  15,340
  16,122
  16,943
  17,804
  18,707
  19,655
  20,649
  21,692
  22,787
  23,937
  25,143
  26,409
  27,737
  29,132
  30,596
  32,133
  33,746
  35,440
  37,217
  39,084
  41,043
  43,101
  45,260
  47,528
  49,908
  52,408
  55,032
  57,787
  60,680
  63,717
  66,906
Variable operating expenses, $m
 
  14,924
  15,679
  16,471
  17,302
  18,173
  19,088
  20,048
  21,055
  22,112
  23,221
  24,290
  25,512
  26,795
  28,141
  29,555
  31,039
  32,596
  34,231
  35,948
  37,750
  39,643
  41,629
  43,715
  45,904
  48,203
  50,617
  53,151
  55,811
  58,605
  61,538
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  14,270
  14,924
  15,679
  16,471
  17,302
  18,173
  19,088
  20,048
  21,055
  22,112
  23,221
  24,290
  25,512
  26,795
  28,141
  29,555
  31,039
  32,596
  34,231
  35,948
  37,750
  39,643
  41,629
  43,715
  45,904
  48,203
  50,617
  53,151
  55,811
  58,605
  61,538
Operating income, $m
  1,070
  1,198
  1,264
  1,333
  1,405
  1,481
  1,561
  1,645
  1,733
  1,825
  1,922
  2,119
  2,225
  2,337
  2,455
  2,578
  2,708
  2,843
  2,986
  3,136
  3,293
  3,458
  3,631
  3,813
  4,004
  4,205
  4,415
  4,636
  4,868
  5,112
  5,368
EBITDA, $m
  1,217
  1,383
  1,454
  1,528
  1,605
  1,687
  1,772
  1,861
  1,955
  2,054
  2,158
  2,266
  2,380
  2,500
  2,625
  2,757
  2,896
  3,041
  3,194
  3,354
  3,522
  3,698
  3,884
  4,078
  4,283
  4,497
  4,722
  4,959
  5,207
  5,468
  5,741
Interest expense (income), $m
  19
  23
  33
  43
  54
  65
  77
  89
  102
  116
  130
  145
  160
  177
  194
  212
  231
  251
  272
  294
  317
  341
  367
  393
  422
  451
  482
  514
  548
  584
  622
Earnings before tax, $m
  1,074
  1,174
  1,231
  1,290
  1,351
  1,416
  1,484
  1,556
  1,631
  1,709
  1,792
  1,974
  2,065
  2,161
  2,261
  2,366
  2,476
  2,592
  2,714
  2,842
  2,976
  3,117
  3,265
  3,420
  3,583
  3,754
  3,933
  4,122
  4,320
  4,528
  4,746
Tax expense, $m
  387
  317
  332
  348
  365
  382
  401
  420
  440
  462
  484
  533
  558
  583
  610
  639
  669
  700
  733
  767
  803
  842
  881
  923
  967
  1,014
  1,062
  1,113
  1,166
  1,223
  1,281
Net income, $m
  687
  857
  898
  941
  987
  1,034
  1,084
  1,136
  1,190
  1,248
  1,308
  1,441
  1,508
  1,577
  1,650
  1,727
  1,808
  1,892
  1,981
  2,074
  2,172
  2,275
  2,383
  2,496
  2,615
  2,740
  2,871
  3,009
  3,154
  3,305
  3,465

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  243
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  8,859
  9,057
  9,519
  10,002
  10,510
  11,042
  11,601
  12,187
  12,802
  13,448
  14,125
  14,836
  15,583
  16,366
  17,189
  18,052
  18,958
  19,910
  20,909
  21,957
  23,058
  24,214
  25,427
  26,701
  28,038
  29,443
  30,917
  32,465
  34,090
  35,796
  37,588
Adjusted assets (=assets-cash), $m
  8,616
  9,057
  9,519
  10,002
  10,510
  11,042
  11,601
  12,187
  12,802
  13,448
  14,125
  14,836
  15,583
  16,366
  17,189
  18,052
  18,958
  19,910
  20,909
  21,957
  23,058
  24,214
  25,427
  26,701
  28,038
  29,443
  30,917
  32,465
  34,090
  35,796
  37,588
Revenue / Adjusted assets
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
  1.780
Average production assets, $m
  1,258
  1,322
  1,389
  1,460
  1,534
  1,612
  1,693
  1,779
  1,869
  1,963
  2,062
  2,166
  2,274
  2,389
  2,509
  2,635
  2,767
  2,906
  3,052
  3,205
  3,366
  3,534
  3,711
  3,897
  4,092
  4,297
  4,513
  4,739
  4,976
  5,225
  5,486
Working capital, $m
  1,704
  1,870
  1,965
  2,065
  2,170
  2,280
  2,395
  2,516
  2,643
  2,777
  2,917
  3,063
  3,218
  3,379
  3,549
  3,727
  3,915
  4,111
  4,317
  4,534
  4,761
  5,000
  5,250
  5,513
  5,789
  6,079
  6,384
  6,703
  7,039
  7,391
  7,761
Total debt, $m
  914
  946
  1,236
  1,540
  1,860
  2,194
  2,546
  2,914
  3,301
  3,707
  4,134
  4,581
  5,051
  5,543
  6,061
  6,604
  7,174
  7,772
  8,401
  9,060
  9,753
  10,479
  11,243
  12,044
  12,885
  13,768
  14,696
  15,669
  16,691
  17,765
  18,892
Total liabilities, $m
  5,666
  5,697
  5,987
  6,291
  6,611
  6,945
  7,297
  7,665
  8,052
  8,458
  8,885
  9,332
  9,802
  10,294
  10,812
  11,355
  11,925
  12,523
  13,152
  13,811
  14,504
  15,230
  15,994
  16,795
  17,636
  18,519
  19,447
  20,420
  21,442
  22,516
  23,643
Total equity, $m
  3,194
  3,360
  3,531
  3,711
  3,899
  4,097
  4,304
  4,521
  4,750
  4,989
  5,240
  5,504
  5,781
  6,072
  6,377
  6,697
  7,034
  7,387
  7,757
  8,146
  8,555
  8,983
  9,433
  9,906
  10,402
  10,923
  11,470
  12,044
  12,647
  13,280
  13,945
Total liabilities and equity, $m
  8,860
  9,057
  9,518
  10,002
  10,510
  11,042
  11,601
  12,186
  12,802
  13,447
  14,125
  14,836
  15,583
  16,366
  17,189
  18,052
  18,959
  19,910
  20,909
  21,957
  23,059
  24,213
  25,427
  26,701
  28,038
  29,442
  30,917
  32,464
  34,089
  35,796
  37,588
Debt-to-equity ratio
  0.286
  0.280
  0.350
  0.420
  0.480
  0.540
  0.590
  0.640
  0.700
  0.740
  0.790
  0.830
  0.870
  0.910
  0.950
  0.990
  1.020
  1.050
  1.080
  1.110
  1.140
  1.170
  1.190
  1.220
  1.240
  1.260
  1.280
  1.300
  1.320
  1.340
  1.350
Adjusted equity ratio
  0.343
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  687
  857
  898
  941
  987
  1,034
  1,084
  1,136
  1,190
  1,248
  1,308
  1,441
  1,508
  1,577
  1,650
  1,727
  1,808
  1,892
  1,981
  2,074
  2,172
  2,275
  2,383
  2,496
  2,615
  2,740
  2,871
  3,009
  3,154
  3,305
  3,465
Depreciation, amort., depletion, $m
  147
  186
  190
  195
  200
  205
  211
  217
  223
  229
  236
  147
  155
  163
  171
  179
  188
  198
  208
  218
  229
  240
  252
  265
  278
  292
  307
  322
  338
  355
  373
Funds from operations, $m
  1,032
  1,043
  1,088
  1,136
  1,186
  1,239
  1,294
  1,352
  1,413
  1,477
  1,544
  1,588
  1,662
  1,740
  1,821
  1,906
  1,996
  2,090
  2,189
  2,293
  2,401
  2,516
  2,636
  2,762
  2,894
  3,033
  3,178
  3,331
  3,492
  3,661
  3,838
Change in working capital, $m
  86
  91
  95
  100
  105
  110
  115
  121
  127
  133
  140
  147
  154
  162
  170
  178
  187
  196
  206
  217
  227
  239
  251
  263
  276
  290
  304
  320
  336
  352
  370
Cash from operations, $m
  946
  952
  993
  1,036
  1,082
  1,129
  1,179
  1,231
  1,286
  1,344
  1,404
  1,442
  1,508
  1,578
  1,651
  1,728
  1,809
  1,894
  1,983
  2,076
  2,174
  2,277
  2,385
  2,499
  2,618
  2,743
  2,874
  3,012
  3,157
  3,309
  3,468
Maintenance CAPEX, $m
  0
  -86
  -90
  -95
  -99
  -104
  -110
  -115
  -121
  -127
  -134
  -140
  -147
  -155
  -163
  -171
  -179
  -188
  -198
  -208
  -218
  -229
  -240
  -252
  -265
  -278
  -292
  -307
  -322
  -338
  -355
New CAPEX, $m
  -161
  -64
  -67
  -71
  -74
  -78
  -82
  -86
  -90
  -94
  -99
  -104
  -109
  -114
  -120
  -126
  -132
  -139
  -146
  -153
  -161
  -169
  -177
  -186
  -195
  -205
  -215
  -226
  -237
  -249
  -261
Cash from investing activities, $m
  -594
  -150
  -157
  -166
  -173
  -182
  -192
  -201
  -211
  -221
  -233
  -244
  -256
  -269
  -283
  -297
  -311
  -327
  -344
  -361
  -379
  -398
  -417
  -438
  -460
  -483
  -507
  -533
  -559
  -587
  -616
Free cash flow, $m
  352
  803
  836
  871
  908
  947
  988
  1,031
  1,075
  1,122
  1,172
  1,198
  1,252
  1,309
  1,369
  1,431
  1,497
  1,567
  1,639
  1,715
  1,795
  1,879
  1,968
  2,060
  2,157
  2,259
  2,366
  2,479
  2,597
  2,721
  2,851
Issuance/(repayment) of debt, $m
  250
  275
  290
  304
  319
  335
  351
  369
  387
  406
  426
  447
  470
  493
  517
  543
  570
  598
  628
  660
  692
  727
  763
  801
  841
  883
  927
  974
  1,022
  1,073
  1,127
Issuance/(repurchase) of shares, $m
  -198
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  65
  275
  290
  304
  319
  335
  351
  369
  387
  406
  426
  447
  470
  493
  517
  543
  570
  598
  628
  660
  692
  727
  763
  801
  841
  883
  927
  974
  1,022
  1,073
  1,127
Total cash flow (excl. dividends), $m
  418
  1,078
  1,126
  1,176
  1,227
  1,282
  1,339
  1,399
  1,462
  1,528
  1,598
  1,645
  1,721
  1,802
  1,886
  1,974
  2,067
  2,165
  2,267
  2,375
  2,488
  2,606
  2,731
  2,861
  2,999
  3,143
  3,294
  3,453
  3,619
  3,794
  3,978
Retained Cash Flow (-), $m
  -47
  -166
  -171
  -179
  -188
  -198
  -207
  -217
  -228
  -240
  -251
  -264
  -277
  -291
  -305
  -320
  -336
  -353
  -371
  -389
  -408
  -429
  -450
  -473
  -496
  -521
  -547
  -574
  -603
  -633
  -665
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  911
  955
  996
  1,039
  1,084
  1,132
  1,182
  1,234
  1,289
  1,346
  1,381
  1,444
  1,511
  1,581
  1,654
  1,731
  1,812
  1,897
  1,986
  2,079
  2,178
  2,281
  2,389
  2,502
  2,622
  2,747
  2,878
  3,016
  3,161
  3,313
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  874
  874
  867
  856
  841
  821
  798
  771
  740
  706
  656
  616
  575
  531
  486
  440
  394
  349
  306
  264
  225
  189
  157
  127
  102
  80
  62
  47
  35
  25
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Genuine Parts Company distributes automotive replacement parts, industrial replacement parts, office products, and electrical/electronic materials in the United States, Canada, Australia, New Zealand, Mexico, and Puerto Rico. It distributes automotive replacement parts for imported vehicles, trucks, SUVs, buses, motorcycles, recreational vehicles, farm vehicles, small engines, farm equipment, and heavy duty equipment; and accessory items used in the automotive aftermarket, including repair shops, service stations, fleet operators, automobile and truck dealers, leasing companies, bus and truck lines, mass merchandisers, farms, industrial concerns, and individuals through 57 NAPA automotive parts distribution centers and 1,100 NAPA AUTO PARTS stores. The company also distributes industrial replacement parts and related supplies, such as bearings, mechanical and electrical power transmission products, industrial automation products, hoses, hydraulic and pneumatic components, industrial supplies, and material handling products primarily for food and beverage, forest products, primary metal, pulp and paper, mining, automotive, oil and gas, petrochemical, and pharmaceutical industries through 483 branches, 13 distribution centers, and 43 service centers. In addition, it distributes office furniture, technology products, general office and school supplies, cleaning, janitorial and breakroom supplies, safety and security items, healthcare products, and disposable food service products to resellers through 56 distribution centers. Further, the company distributes wires and cables, connectivity solutions, insulating and conductive materials, assembly tools, test equipment, custom fabricated parts, and specialty coated materials to original equipment manufacturers, motor repair shops, specialty wire and cable users, and various industrial assembly markets. Genuine Parts Company was founded in 1928 and is based in Atlanta, Georgia.

FINANCIAL RATIOS  of  Genuine Parts (GPC)

Valuation Ratios
P/E Ratio 17.8
Price to Sales 0.8
Price to Book 3.8
Price to Tangible Book
Price to Cash Flow 12.9
Price to Free Cash Flow 15.5
Growth Rates
Sales Growth Rate 0.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 46.4%
Cap. Spend. - 3 Yr. Gr. Rate 5.4%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 18.4%
Total Debt to Equity 28.6%
Interest Coverage 58
Management Effectiveness
Return On Assets 8.2%
Ret/ On Assets - 3 Yr. Avg. 8.7%
Return On Total Capital 17.4%
Ret/ On T. Cap. - 3 Yr. Avg. 17.5%
Return On Equity 21.7%
Return On Equity - 3 Yr. Avg. 21.7%
Asset Turnover 1.8
Profitability Ratios
Gross Margin 30%
Gross Margin - 3 Yr. Avg. 29.9%
EBITDA Margin 8.1%
EBITDA Margin - 3 Yr. Avg. 8.3%
Operating Margin 7%
Oper. Margin - 3 Yr. Avg. 7.2%
Pre-Tax Margin 7%
Pre-Tax Margin - 3 Yr. Avg. 7.2%
Net Profit Margin 4.5%
Net Profit Margin - 3 Yr. Avg. 4.6%
Effective Tax Rate 36%
Eff/ Tax Rate - 3 Yr. Avg. 36.5%
Payout Ratio 56.3%

GPC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GPC stock intrinsic value calculation we used $15340 million for the last fiscal year's total revenue generated by Genuine Parts. The default revenue input number comes from 2016 income statement of Genuine Parts. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our GPC stock valuation model: a) initial revenue growth rate of 5.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for GPC is calculated based on our internal credit rating of Genuine Parts, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Genuine Parts.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of GPC stock the variable cost ratio is equal to 92.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for GPC stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Genuine Parts.

Corporate tax rate of 27% is the nominal tax rate for Genuine Parts. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the GPC stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for GPC are equal to 8.2%.

Life of production assets of 14.7 years is the average useful life of capital assets used in Genuine Parts operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for GPC is equal to 11.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3194 million for Genuine Parts - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 147.976 million for Genuine Parts is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Genuine Parts at the current share price and the inputted number of shares is $12.2 billion.

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COMPANY NEWS

▶ ETFs with exposure to Genuine Parts Co. : August 14, 2017   [Aug-14-17 04:39PM  Capital Cube]
▶ 3 Top Stocks for Low-Risk Investors   [Aug-12-17 10:49AM  Motley Fool]
▶ How Safe Is Genuine Parts Company's Dividend?   [Aug-09-17 07:33PM  Motley Fool]
▶ 3 Dividend Stocks You Haven't Thought Of   [Jul-29-17 10:31AM  Motley Fool]
▶ ETFs with exposure to Genuine Parts Co. : July 24, 2017   [Jul-24-17 04:12PM  Capital Cube]
▶ Middlemen the new Amazon victims?   [11:51AM  CNBC Videos]
▶ Genuine Parts misses 2Q profit forecasts   [12:20AM  Associated Press]
▶ ETFs with exposure to Genuine Parts Co. : July 14, 2017   [Jul-14-17 02:38PM  Capital Cube]
▶ IIROC Trade Resumption - GPC   [Jul-06-17 12:06PM  CNW Group]
▶ IIROC Trading Halt - GPC, GPC.PR.A   [10:18AM  CNW Group]
▶ Auto parts sector plunge 'not clear': Analyst   [Jul-05-17 01:22PM  CNBC Videos]
▶ ETFs with exposure to Genuine Parts Co. : June 15, 2017   [Jun-15-17 02:04PM  Capital Cube]
▶ Top 4 Consumer Cyclical Stocks for 2017   [06:00AM  Investopedia]
▶ ETFs with exposure to Genuine Parts Co. : May 19, 2017   [May-19-17 01:55PM  Capital Cube]
▶ ETFs with exposure to Genuine Parts Co. : May 8, 2017   [May-08-17 04:36PM  Capital Cube]
▶ ETFs with exposure to Genuine Parts Co. : April 28, 2017   [Apr-28-17 03:54PM  Capital Cube]
▶ Gallagher retiring as executive officer of Genuine Parts Co.   [Apr-24-17 06:09PM  American City Business Journals]
▶ Genuine Parts tops Street 1Q forecasts   [08:45AM  Associated Press]
▶ Fear of Amazon's Auto-Parts Efforts Overblown   [Apr-14-17 07:00AM  Morningstar]
▶ 3 Stocks to Buy Near 52-Week Lows   [Apr-06-17 03:32PM  Motley Fool]
Stock chart of GPC Financial statements of GPC
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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