Raymond James Double Upgrades Genuine Parts to Strong Buy
Raymond James has double upgraded Genuine Parts Company (GPC), moving the stock from Market Perform directly to Strong Buy, and establishing a price target of $145 per share. With shares trading near $119 at the time of the upgrade, the new target implies approximately 25% upside. The stock rose roughly 2% on the news.
Why the Rating Changed
The upgrade centers on a specific and significant corporate catalyst: Genuine Parts’ planned separation of its Auto and Industrial businesses. Raymond James based its $145 price target on a sum-of-the-parts valuation, reflecting the firm’s view that the two business segments are worth more as independent entities than as a combined company.
Several key factors drove the double upgrade:
- Breakup value: Raymond James believes the planned business separation will unlock value that is not currently reflected in the stock price. By valuing the Auto and Industrial segments independently, the firm arrived at a price target meaningfully above where shares are currently trading.
- Attractive risk-reward profile: The analyst team cited a favorable risk-reward setup at current price levels, suggesting that downside risk is limited relative to the potential upside from the separation.
- Separation catalyst on the horizon: The planned Auto/Industrial split, targeted for the first quarter of 2027, provides a concrete near-term catalyst that could drive share price appreciation as the market re-rates the businesses individually.
It is worth noting that Genuine Parts’ most recent quarterly results were mixed. The company’s fourth-quarter performance came in below Wall Street’s revenue and non-GAAP profit expectations, and the market reacted negatively. However, Raymond James appears to be looking past the near-term operational challenges and focusing on the structural value that the separation could create.
Dividend Overview
Genuine Parts is a well-known dividend payer with a long history of returning capital to shareholders. The stock currently pays an annual dividend of $4.25 per share, which translates to a dividend yield of approximately 3.66% based on recent prices. The most recent ex-dividend date was March 5, 2026.
For income-focused investors, the yield is notable, particularly if the upcoming business separation preserves or enhances the combined dividend capacity of the two resulting entities. Investors should monitor how the company plans to allocate its dividend policy across the separated businesses once more details are disclosed.
Looking Ahead
The key question for investors is whether the planned separation will proceed on schedule and whether the market will begin to price in the breakup value ahead of the expected first-quarter 2027 completion. Raymond James’ conviction in a double upgrade — skipping Outperform entirely — signals a strong belief that current prices do not adequately reflect the sum-of-the-parts opportunity.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.