Valued at a market cap of $19.2 billion, Genuine Parts Company (GPC) distributes automotive and industrial replacement parts and materials. The Atlanta, Georgia-based company distributes a wide range of parts and materials, including those for hybrid and electric vehicles. Also, it provides bearings, mechanical and electrical power transmission products, and bearings and mechanical and electrical power transmission products, among others. 

Companies valued at $10 billion or more are generally described as “large-cap” stocks, and Genuine Parts fits right into that category. The company operates with more than 60,000 employees and has over 10,700 locations in 17 countries across North America, Europe, and Australasia.

Shares of GPC are trading 15.3% below their 52-week high of $164.45, which they hit on Apr. 18. The auto parts supplier has marginally declined over the past three months, lagging behind the broader Consumer Discretionary Select Sector SPDR Fund’s (XLY) 8.8% return over the same time frame.

Moreover, in the longer term, GPC stock has marginally gained on a YTD basis, lagging behind XLY’s nearly 10% gains. Shares of GPC have declined 6.2% over the past 52 weeks, underperforming XLY’s 16.6% returns over the same time frame.

To confirm its bearish trend, GPC has been trading below its 200-day moving average since early August and has remained below its 50-day moving average since early September. 

GPC’s underperformance is driven by softness in European markets and ongoing headwinds in the automotive and industrial sectors.

Moreover, on Jul. 23, shares of GPC declined marginally following its Q2 earnings release. The company reported adjusted earnings of $2.44 per share, which missed the Wall Street estimates of $2.59. Its revenue of $5.96 billion also lagged behind the consensus estimates of $6.04 billion. The company lowered its full-year earnings guidance to $9.30 - $9.50 per share, which further dampened investor sentiments. 

GPC has underperformed its rival, O'Reilly Automotive, Inc. (ORLY), which gained 22.1% over the past 52 weeks and 19.4% on a YTD basis.

Despite GPC’s underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from nine analysts in coverage, and the mean price target of $154.88 suggests a premium of 11.8% to its current levels.

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