As of June 9, 2025, Genuine Parts Co's estimated intrinsic value ranges from $141.63 to $375.01 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $375.01 | +199.4% |
| Discounted Cash Flow (5Y) | $296.39 | +136.6% |
| Dividend Discount Model (Multi-Stage) | $242.83 | +93.8% |
| Dividend Discount Model (Stable) | $141.63 | +13.1% |
| Earnings Power Value | $144.91 | +15.7% |
Is Genuine Parts Co (GPC) undervalued or overvalued?
With the current market price at $125.27, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Genuine Parts Co's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.35 | 0.57 |
| Cost of equity | 5.5% | 8.0% |
| Cost of debt | 4.6% | 5.1% |
| Tax rate | 24.7% | 24.9% |
| Debt/Equity ratio | 0.25 | 0.25 |
| After-tax WACC | 5.1% | 7.2% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $296 | $45,305M | 83.7% |
| 10-Year Growth | $375 | $56,217M | 70.9% |
| 5-Year EBITDA | $178 | $28,884M | 74.4% |
| 10-Year EBITDA | $248 | $38,525M | 57.6% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $1,446M |
| Discount Rate (WACC) | 7.2% - 5.1% |
| Enterprise Value | $20,079M - $28,483M |
| Net Debt | $4,169M |
| Equity Value | $15,910M - $24,313M |
| Outstanding Shares | 139M |
| Fair Value | $115 - $175 |
| Selected Fair Value | $144.91 |
| Metric | Value |
|---|---|
| Market Capitalization | $17386M |
| Enterprise Value | $21556M |
| Trailing P/E | 20.46 |
| Forward P/E | 15.45 |
| Trailing EV/EBITDA | 8.70 |
| Current Dividend Yield | 320.17% |
| Dividend Growth Rate (5Y) | 5.19% |
| Debt-to-Equity Ratio | 0.25 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $112.50 |
| Discounted Cash Flow (5Y) | 25% | $74.10 |
| Dividend Discount Model (Multi-Stage) | 20% | $48.57 |
| Dividend Discount Model (Stable) | 15% | $21.24 |
| Earnings Power Value | 10% | $14.49 |
| Weighted Average | 100% | $270.90 |
Based on our comprehensive valuation analysis, Genuine Parts Co's weighted average intrinsic value is $270.90, which is approximately 116.3% above the current market price of $125.27.
Key investment considerations:
Given these factors, we believe Genuine Parts Co is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.