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DA Davidson Starts Genuine Parts (GPC) at Buy on Spin-Off and Cost-Cutting Potential

With a 5-Year Average Dividend Growth Rate of 5.45%, Genuine Parts Company (NYSE:GPC) is included among the Top 11 Dividend Kings to Buy for Safe Dividend Growth.

On June 16, DA Davidson initiated coverage of Genuine Parts Company with a Buy rating and a $145 price target. The firm views the stock as “materially undervalued” and said the planned spin-off of the motion business could unlock value.DA Davidson also sees more upside potential from cost reductions within the NAPA business. The firm noted that Genuine Parts also has exposure to an improving industrial upcycle.

During the company’s first-quarter 2026 earnings call, CEO William Stengel said the separation process remained on track and continued to move forward as planned. He said the company made progress toward completing the separation in the first quarter of 2027. Stengel also noted that teams performed well during the quarter and delivered financial results that exceeded the company’s expectations.

Discussing geopolitical challenges, Stengel said the war in the Middle East required the company to remain flexible and disciplined. He explained that the conflict affected the movement of some goods through the global supply chain and added pressure to certain products and logistics costs. At the same time, he said the company did not see a significant impact on its financial results during the first quarter.

CFO Herbert Nappier said the company’s teams delivered a strong first-quarter performance, with sales meeting expectations and profits coming in ahead of forecasts. He reported adjusted earnings per share of $1.77 and said nonrecurring costs related to restructuring and the separation totaled $75 million before taxes, or $56 million after taxes.

Genuine Parts Company is a global service provider of automotive and industrial replacement parts and value-added solutions.

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