Genuine Parts CompanyGPCNYSE

Overview Intelligence Charts News Fundamentals

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $386.42 per share(market-calibrated)

+231.9%

Upside to Fair Value

Current

$116.42

Pure Model

$449.91

Fair Value

$386.42

Bull Case

$559.26

Bear Case

$329.41

Market Reality Check

Model Terminal Growth

3.00%

Market-Implied Growth

0.50%

Calibrated Growth

2.13%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $449.91.

What's Driving This Ratingfor GPC

✓

CapEx already efficient

CapEx at 1.77% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 5.65% — below the sector mature average of 12.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $3.6B (10.34% margin).

→

Moderate revenue growth

Analyst consensus projects 4.42% revenue growth, fading to 3.00% by Year 10. Revenue reaches $35.1B (vs $24.3B today).

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 250bps below the model's 3.00%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 65.84% indicates efficient cash generation. FCF reaches $2.8B by Year 10 (7.85% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.73

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)7.80%

Cost of Debt

Pre-tax Cost of Debt1.11%

Tax Rate21.00%

After-tax Cost of Debt0.88%

Equity Weight (E/V)66.16%

Debt Weight (D/V)33.84%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (66.16% × 7.80%) + (33.84% × 0.88%)

= 5.50%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$25.4B	$27.7B	$30.3B	$32.1B	$35.1B
EBIT	$1.4B	$1.6B	$2.1B	$2.8B	$3.6B
Tax	$301M	$329M	$440M	$590M	$761M
NOPAT	$1.1B	$1.2B	$1.7B	$2.2B	$2.9B
+ Depreciation	$404M	$442M	$482M	$511M	$559M
- Capex	$450M	$492M	$537M	$569M	$622M
- Δ NWC	$48M	$63M	$39M	$42M	$46M
Free Cash Flow	$1.0B	$1.1B	$1.6B	$2.1B	$2.8B
Discount Factor	0.948	0.852	0.765	0.687	0.585
Present Value	$985M	$958M	$1.2B	$1.5B	$1.6B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$2.8B

Terminal Growth Rate3.00%

WACC5.50%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$113.5B

PV of Terminal Value$66.4B

Exit Multiple Method

Year 10 EBITDA$4.2B

Exit Multiple (EV/EBITDA)20.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$83.7B

PV of Terminal Value$49.0B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$12.6B

PV of Terminal Value$66.4B

Enterprise Value$79.0B

(-) Net Debt$7.8B

Equity Value$71.2B

Shares Outstanding139M

Price per Share$512.71

Exit Multiple Method

PV of Projected FCFs$12.6B

PV of Terminal Value$49.0B

Enterprise Value$61.6B

(-) Net Debt$7.8B

Equity Value$53.8B

Shares Outstanding139M

Price per Share$387.10

Pure Model Fair Value

$449.91

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.00%	2.50%	3.00%	3.50%	4.00%
3.50%	$587.79	$560.99	$535.45	$511.13	$487.94
4.50%	$494.29	$560.99	$535.45	$511.13	$487.94
5.50%	$379.94	$409.10	$449.91	$511.13	$487.94
6.50%	$309.64	$325.26	$345.34	$372.12	$409.61
7.50%	$260.19	$269.59	$281.07	$295.44	$313.90

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$329.41

182.9% vs current

• -25% vs analyst consensus
• Terminal growth: 2.5%
• Beta: 0.92

Base Case

$449.91

286.5% vs current

• Analyst consensus
• Terminal growth: 3.0%
• Beta: 0.73

Bull Case

$559.26

380.4% vs current

• +25% vs analyst consensus
• Terminal growth: 3.5%
• Beta: 0.62

Key Assumptions & Drivers• Consumer Cyclical Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth4.42%

Year 3 Revenue Growth5.37%

Year 5 Revenue Growth3.00%

Year 7 Revenue Growth3.00%

Year 10 Revenue Growth3.00%

Terminal Growth Rate3.00%

Margin & Efficiency

Current EBIT Margin5.65%

Terminal EBIT Margin12.00%

Tax Rate21.00%

Historical Capex / Rev1.77%

NWC / Revenue4.47%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 20x EV/EBITDA (Consumer Cyclical sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

Explore More

S&P 500 Screener

Filter and sort all 500 stocks

Market Movers

Today's biggest gainers and losers

Market Heatmap

Visual sector performance