Genuine Parts' (GPC) industrial business is building on positive momentum from Q3 inflection, while the auto business is expected to be supported by same-SKU inflation in Q4, which may drive sales, Truist Securities said in a note Thursday.
The brokerage said that the company's industrial division is expected to drive earnings growth due to its significant operational leverage, while automotive sales are expected to grow 5% in Q4 and are poised to continue benefiting from operational improvements, industry trends, and inflation through H1.
The analyst views the company's Motion segment as "a coiled spring" that should generate leverage when the industrial cycle eventually turns, noting that the company has maintained margins despite flattish sales.
Truist cited multiple positive catalysts for Genuine Parts, including Elliott Management's involvement.
Genuine Parts said it will report Q4 and full-year 2025 results Tuesday.
Truist Securities raised its price target on the stock to $162 from $146 and maintained its buy rating.
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