Intrinsic value of Genuine Parts - GPC

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$93.33

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$93.33

 
Intrinsic value

$84.32

 
Up/down potential

-10%

 
Rating

hold

 
Value-price divergence* premium content

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*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 13.9

 

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
  2.70
  2.93
  3.14
  3.32
  3.49
  3.64
  3.78
  3.90
  4.01
  4.11
  4.20
  4.28
  4.35
  4.42
  4.47
  4.53
  4.57
  4.62
  4.65
  4.69
  4.72
  4.75
  4.77
  4.80
  4.82
  4.83
  4.85
  4.87
  4.88
  4.89
Revenue, $m
  15,340
  15,754
  16,216
  16,724
  17,280
  17,884
  18,535
  19,235
  19,985
  20,787
  21,641
  22,549
  23,514
  24,537
  25,620
  26,766
  27,978
  29,258
  30,608
  32,033
  33,535
  35,118
  36,786
  38,542
  40,390
  42,336
  44,382
  46,536
  48,800
  51,181
  53,685
Variable operating expenses, $m
 
  14,586
  15,010
  15,478
  15,989
  16,544
  17,143
  17,787
  18,477
  19,214
  20,000
  20,740
  21,627
  22,568
  23,565
  24,619
  25,733
  26,910
  28,152
  29,463
  30,845
  32,301
  33,834
  35,449
  37,150
  38,939
  40,821
  42,802
  44,885
  47,075
  49,378
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
  14,586
  15,010
  15,478
  15,989
  16,544
  17,143
  17,787
  18,477
  19,214
  20,000
  20,740
  21,627
  22,568
  23,565
  24,619
  25,733
  26,910
  28,152
  29,463
  30,845
  32,301
  33,834
  35,449
  37,150
  38,939
  40,821
  42,802
  44,885
  47,075
  49,378
Operating income, $m
  1,070
  1,168
  1,205
  1,246
  1,291
  1,339
  1,391
  1,448
  1,508
  1,572
  1,641
  1,809
  1,887
  1,969
  2,056
  2,148
  2,245
  2,347
  2,456
  2,570
  2,691
  2,818
  2,951
  3,092
  3,241
  3,397
  3,561
  3,734
  3,915
  4,106
  4,307
EBITDA, $m
  1,217
  1,352
  1,391
  1,435
  1,483
  1,535
  1,590
  1,651
  1,715
  1,784
  1,857
  1,935
  2,018
  2,106
  2,198
  2,297
  2,401
  2,511
  2,627
  2,749
  2,878
  3,013
  3,157
  3,307
  3,466
  3,633
  3,808
  3,993
  4,188
  4,392
  4,607
Interest expense (income), $m
  19
  23
  29
  34
  41
  47
  55
  63
  72
  81
  91
  101
  113
  125
  137
  151
  165
  180
  196
  212
  230
  248
  268
  289
  310
  333
  357
  383
  409
  437
  467
Earnings before tax, $m
  1,074
  1,145
  1,177
  1,212
  1,250
  1,292
  1,337
  1,385
  1,436
  1,491
  1,550
  1,708
  1,774
  1,844
  1,918
  1,997
  2,080
  2,168
  2,260
  2,358
  2,461
  2,569
  2,683
  2,804
  2,930
  3,063
  3,204
  3,351
  3,506
  3,669
  3,841
Tax expense, $m
  387
  309
  318
  327
  338
  349
  361
  374
  388
  403
  418
  461
  479
  498
  518
  539
  562
  585
  610
  637
  664
  694
  724
  757
  791
  827
  865
  905
  947
  991
  1,037
Net income, $m
  687
  836
  859
  885
  913
  943
  976
  1,011
  1,048
  1,089
  1,131
  1,247
  1,295
  1,346
  1,400
  1,458
  1,518
  1,582
  1,650
  1,721
  1,796
  1,875
  1,959
  2,047
  2,139
  2,236
  2,339
  2,446
  2,559
  2,678
  2,804

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
  8,851
  9,110
  9,396
  9,708
  10,047
  10,413
  10,806
  11,228
  11,678
  12,158
  12,668
  13,210
  13,785
  14,393
  15,037
  15,718
  16,437
  17,196
  17,996
  18,840
  19,729
  20,666
  21,653
  22,691
  23,784
  24,934
  26,144
  27,416
  28,754
  30,160
Adjusted assets (=assets-cash), $m
  8,616
  8,851
  9,110
  9,396
  9,708
  10,047
  10,413
  10,806
  11,228
  11,678
  12,158
  12,668
  13,210
  13,785
  14,393
  15,037
  15,718
  16,437
  17,196
  17,996
  18,840
  19,729
  20,666
  21,653
  22,691
  23,784
  24,934
  26,144
  27,416
  28,754
  30,160
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
  1,292
  1,330
  1,371
  1,417
  1,466
  1,520
  1,577
  1,639
  1,704
  1,775
  1,849
  1,928
  2,012
  2,101
  2,195
  2,294
  2,399
  2,510
  2,627
  2,750
  2,880
  3,016
  3,160
  3,312
  3,472
  3,639
  3,816
  4,002
  4,197
  4,402
Working capital, $m
  1,704
  1,827
  1,881
  1,940
  2,005
  2,074
  2,150
  2,231
  2,318
  2,411
  2,510
  2,616
  2,728
  2,846
  2,972
  3,105
  3,245
  3,394
  3,551
  3,716
  3,890
  4,074
  4,267
  4,471
  4,685
  4,911
  5,148
  5,398
  5,661
  5,937
  6,227
Total debt, $m
  914
  816
  979
  1,159
  1,355
  1,569
  1,799
  2,046
  2,311
  2,594
  2,896
  3,217
  3,558
  3,920
  4,302
  4,707
  5,136
  5,588
  6,065
  6,569
  7,099
  7,659
  8,248
  8,868
  9,522
  10,209
  10,932
  11,693
  12,494
  13,335
  14,220
Total liabilities, $m
  5,666
  5,567
  5,730
  5,910
  6,106
  6,320
  6,550
  6,797
  7,062
  7,345
  7,647
  7,968
  8,309
  8,671
  9,053
  9,458
  9,887
  10,339
  10,816
  11,320
  11,850
  12,410
  12,999
  13,619
  14,273
  14,960
  15,683
  16,444
  17,245
  18,086
  18,971
Total equity, $m
  3,194
  3,284
  3,380
  3,486
  3,602
  3,727
  3,863
  4,009
  4,165
  4,332
  4,510
  4,700
  4,901
  5,114
  5,340
  5,579
  5,831
  6,098
  6,380
  6,677
  6,990
  7,320
  7,667
  8,033
  8,418
  8,824
  9,250
  9,699
  10,171
  10,668
  11,189
Total liabilities and equity, $m
  8,860
  8,851
  9,110
  9,396
  9,708
  10,047
  10,413
  10,806
  11,227
  11,677
  12,157
  12,668
  13,210
  13,785
  14,393
  15,037
  15,718
  16,437
  17,196
  17,997
  18,840
  19,730
  20,666
  21,652
  22,691
  23,784
  24,933
  26,143
  27,416
  28,754
  30,160
Debt-to-equity ratio
  0.286
  0.250
  0.290
  0.330
  0.380
  0.420
  0.470
  0.510
  0.550
  0.600
  0.640
  0.680
  0.730
  0.770
  0.810
  0.840
  0.880
  0.920
  0.950
  0.980
  1.020
  1.050
  1.080
  1.100
  1.130
  1.160
  1.180
  1.210
  1.230
  1.250
  1.270
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
  836
  859
  885
  913
  943
  976
  1,011
  1,048
  1,089
  1,131
  1,247
  1,295
  1,346
  1,400
  1,458
  1,518
  1,582
  1,650
  1,721
  1,796
  1,875
  1,959
  2,047
  2,139
  2,236
  2,339
  2,446
  2,559
  2,678
  2,804
Depreciation, amort., depletion, $m
  147
  183
  186
  189
  192
  195
  199
  203
  207
  212
  216
  126
  131
  137
  143
  149
  156
  163
  171
  179
  187
  196
  205
  215
  225
  236
  248
  260
  272
  286
  299
Funds from operations, $m
  1,032
  1,019
  1,045
  1,074
  1,105
  1,138
  1,175
  1,214
  1,256
  1,300
  1,348
  1,372
  1,426
  1,483
  1,543
  1,607
  1,674
  1,746
  1,821
  1,900
  1,983
  2,071
  2,164
  2,262
  2,364
  2,472
  2,586
  2,706
  2,832
  2,964
  3,103
Change in working capital, $m
  86
  48
  54
  59
  64
  70
  76
  81
  87
  93
  99
  105
  112
  119
  126
  133
  141
  148
  157
  165
  174
  184
  193
  204
  214
  226
  237
  250
  263
  276
  290
Cash from operations, $m
  946
  1,060
  992
  1,015
  1,040
  1,068
  1,099
  1,133
  1,169
  1,207
  1,249
  1,267
  1,314
  1,364
  1,418
  1,474
  1,534
  1,597
  1,664
  1,735
  1,809
  1,888
  1,971
  2,058
  2,150
  2,247
  2,349
  2,456
  2,569
  2,688
  2,813
Maintenance CAPEX, $m
  0
  -86
  -88
  -90
  -93
  -96
  -100
  -103
  -107
  -111
  -116
  -121
  -126
  -131
  -137
  -143
  -149
  -156
  -163
  -171
  -179
  -187
  -196
  -205
  -215
  -225
  -236
  -248
  -260
  -272
  -286
New CAPEX, $m
  -161
  -34
  -38
  -42
  -46
  -49
  -53
  -57
  -62
  -66
  -70
  -74
  -79
  -84
  -89
  -94
  -99
  -105
  -111
  -117
  -123
  -130
  -137
  -144
  -152
  -160
  -168
  -177
  -186
  -195
  -205
Cash from investing activities, $m
  -594
  -120
  -126
  -132
  -139
  -145
  -153
  -160
  -169
  -177
  -186
  -195
  -205
  -215
  -226
  -237
  -248
  -261
  -274
  -288
  -302
  -317
  -333
  -349
  -367
  -385
  -404
  -425
  -446
  -467
  -491
Free cash flow, $m
  352
  941
  866
  882
  901
  923
  946
  972
  1,000
  1,030
  1,063
  1,072
  1,109
  1,149
  1,192
  1,237
  1,285
  1,336
  1,390
  1,447
  1,507
  1,571
  1,638
  1,709
  1,783
  1,862
  1,945
  2,032
  2,124
  2,220
  2,322
Issuance/(repayment) of debt, $m
  250
  145
  163
  180
  196
  213
  230
  247
  265
  283
  302
  321
  341
  361
  383
  405
  428
  452
  477
  503
  531
  559
  589
  621
  653
  687
  723
  761
  800
  841
  885
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
  145
  163
  180
  196
  213
  230
  247
  265
  283
  302
  321
  341
  361
  383
  405
  428
  452
  477
  503
  531
  559
  589
  621
  653
  687
  723
  761
  800
  841
  885
Total cash flow (excl. dividends), $m
  418
  1,086
  1,029
  1,062
  1,098
  1,136
  1,176
  1,219
  1,265
  1,313
  1,364
  1,393
  1,450
  1,511
  1,575
  1,642
  1,713
  1,788
  1,867
  1,951
  2,038
  2,130
  2,227
  2,329
  2,437
  2,549
  2,668
  2,793
  2,924
  3,062
  3,207
Retained Cash Flow (-), $m
  -47
  -90
  -96
  -106
  -116
  -126
  -136
  -146
  -156
  -167
  -178
  -189
  -201
  -213
  -226
  -239
  -253
  -267
  -282
  -297
  -313
  -330
  -348
  -366
  -385
  -405
  -427
  -449
  -472
  -496
  -522
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
 
  996
  933
  956
  982
  1,010
  1,040
  1,073
  1,108
  1,146
  1,186
  1,204
  1,249
  1,298
  1,349
  1,403
  1,461
  1,522
  1,586
  1,654
  1,725
  1,800
  1,880
  1,963
  2,051
  2,144
  2,241
  2,344
  2,452
  2,565
  2,685
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
 
  955
  854
  832
  809
  783
  755
  725
  693
  658
  622
  572
  533
  493
  453
  412
  371
  331
  292
  255
  219
  186
  156
  129
  104
  83
  65
  50
  38
  28
  20
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 20.2
Price to Sales 0.9
Price to Book 4.3
Price to Tangible Book
Price to Cash Flow 14.6
Price to Free Cash Flow 17.6
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 2.7% 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 148.469 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 $13.9 billion.


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COMPANY NEWS

▶ 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]
▶ How Genuine Parts Company (GPC) Stacks Up Against Its Peers   [Dec-10-16 02:04PM  at Insider Monkey]
▶ [$$] Genuine Parts Cuts Outlook As Earnings Disappoint   [09:27AM  at The Wall Street Journal]
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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