Why Is Genuine Parts (GPC) Up 11.8% Since Last Earnings Report?

It has been about a month since the last earnings report for Genuine Parts (GPC). Shares have added about 11.8% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Genuine Parts due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Genuine Parts Company before we dive into how investors and analysts have reacted as of late.

Genuine Parts Beats Q2 Earnings Estimates

Genuine Parts reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter.

Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Comparable sales increased 3.4%, led by strong demand in the Industrial business, while acquisitions and favorable currency movements also supported growth.

Sales Growth Broadens Across Operations

The revenue increase included a 1.2% contribution from acquisitions and a 1.4% favorable foreign currency impact. Growth was recorded across North America Automotive, International Automotive and Industrial, reflecting a broad-based improvement in demand.

Adjusted gross margin expanded 20 basis points to 37.9%. However, adjusted selling, administrative and other expenses represented 29.1% of sales, up from 28.7% a year earlier, partly offsetting the gross-margin benefit.

Industrial Arm Sets the Pace

Industrial sales advanced 7.1% year over year to $2.41 billion. Comparable sales climbed 6.1%, while favorable currency movements added 0.8% and acquisitions contributed 0.2%.

The segment generated EBITDA of $316 million, up 9.8% from the prior-year period. EBITDA margin expanded 30 basis points to 13.1%. Growth was recorded in 11 of 14 end markets, while 10 markets improved sequentially. Maintenance, repair and operations sales grew approximately 7%, supported by large corporate accounts and small and medium-sized local customers.

Automotive Results Show Mixed Margins

North America Automotive sales increased 3.8% to $2.54 billion, driven by a 2.6% comparable-sales gain and a 1.3% acquisition contribution. Segment EBITDA rose 6% to $208 million, while EBITDA margin improved 20 basis points to 8.2%.

Company-owned stores in the United States delivered comparable-sales growth of approximately 4%, including roughly 5.5% growth in the commercial business. The Benson acquisition also remained ahead of the company’s financial and operational targets.

International Automotive revenues rose 8.2% to $1.59 billion. Foreign currency contributed 4.9%, acquisitions added 2.7% and comparable sales increased 0.6%. Segment EBITDA improved 6% to $150 million, but margin contracted 20 basis points to 9.4%. Europe improved sequentially, particularly in the United Kingdom and Germany.

GPC Absorbs Restructuring Costs

GAAP net income declined to $228 million, or $1.65 per share, from $255 million, or $1.83 per share, a year earlier. The difference between GAAP and adjusted results reflected $69 million of after-tax adjustments tied to restructuring and separation activities.

Adjusted net income rose to $296 million from $292 million in the year-ago period. Adjusted EBITDA increased 3.6% year over year to $567 million, though adjusted EBITDA margin declined 20 basis points to 8.7%.

Restructuring and other costs totaled $76 million before taxes, while separation costs were $16 million. GPC remains on track to separate its Global Automotive and Global Industrial businesses into two publicly traded companies in the first quarter of 2027.

2026 Outlook

GPC reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. The company reduced its GAAP earnings forecast to $5.90-$6.40 per share from the previous estimate of $6.10-$6.60. North America Automotive sales growth is now expected at 2.5-4.5%, down from the previous estimate of 3-5%, while International Automotive growth was raised to 5-8% from the previous estimate of 3-6%. Industrial sales growth remains projected at 3-6%.

Cash and Liquidity

Cash from operations totaled $464 million in the first half of 2026, up from $169 million a year earlier. Free cash flow was $259 million against negative $80 million in the prior-year period.

Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash. Year-to-date capital expenditures were $205 million, acquisition spending totaled $38 million and cash dividends reached $288 million. The company continues to expect full-year operating cash flow of $1-$1.2 billion and free cash flow of $550-$700 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in fresh estimates.

VGM Scores

At this time, Genuine Parts has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Genuine Parts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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