Goldman Sachs Gives Earnings Preview On Genuine Parts Co.

Goldman Sachs lifts its Genuine Parts Co. GPC 1Q2011 revenue estimate on better sales reports from Industrial MRO peers and less expected QoQ deceleration at Auto, but maintains its Street-high $0.80 EPS estimate, ahead of consensus of $0.75. Goldman Sachs expects 2013 EPS of $3.95, +6.7% yoy on +3.0% sales growth. It assumes 2013 EBIT margins of 7.7%, +14 bp yoy, predicated on +8 bp of gross margin expansion and 6 bp of expense leverage. Goldman also models 2013 share repurchases of $350 mn. Goldman Sachs remains Neutral on its expectation of fading momentum post-1Q2011 as the industrial cycle slows and Automotive faces tougher compares, while valuation remains robust. Downside risks include higher gas prices and auto parts competition. Upside risks include more sustainable industrial production growth. Goldman Sachs has a $56 PT and Neutral rating on GPC GPC closed Friday at $53.26