Genuine Parts (GPC) delivered an in-line Q2, with focus shifting back to segment performance and the planned corporate separation, UBS Securities said in a note Wednesday.
Analysts said management made it clear that the company remains fully committed to the separation, is not in discussions with O'Reilly Automotive (ORLY), and views recent reports and market speculation as "largely noise."
Management clarified that the previously disclosed $50 million to $75 million in Motion standalone costs are no longer expected to be incremental expenses and will instead be covered within the existing corporate cost structure, according to the note.
Based on its 2025 corporate cost base of about $360 million, management expects $210 million to $230 million to be allocated to Automotive, including about $20 million in asbestos-related expenses. The previously discussed $50 million to $75 million in separation-related costs are expected to be split evenly between the two businesses, analysts said.
"The market is eager for greater visibility around post-separation leadership structures, but this will happen down the road," analysts said.
UBS Securities lowered its price target on Genuine Parts to $122 from $125, while keeping its neutral rating.
Shares of Genuine Parts were up more than 2% in Wednesday trading.
Price: 121.68, Change: +2.56, Percent Change: +2.15
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