O'Reilly Automotive Reportedly Makes Roughly $10 Billion Bid for Genuine Parts' NAPA Auto Parts Business

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Summary · why it matters

O'Reilly Automotive has reportedly made a roughly $10 billion bid for the automotive parts business of Genuine Parts Company, which includes the well-known NAPA Auto Parts brand, though neither company has confirmed a deal. The reported offer, if completed, would meaningfully expand O'Reilly's reach with professional repair shops. O'Reilly's revenue grew 8.5% to $18.6 billion over the past year while earnings grew 10.3%, and the company generated $2.8 billion from operations last fiscal year, leaving $1.6 billion in free cash after spending on stores and equipment. The stock trades at about 27 times its past year's earnings, versus roughly 18.5 times for its peer group, and has fallen around 20% over the past year even as earnings per share rose. Analysts' average price target implies about 26% upside from current levels, and 69 hedge funds held the stock at the end of the second quarter, up from 67 the prior quarter, while short interest stands at just 3.30% of shares available for trading.

Impact on assets 4

Consumer Discretionary▲ · 4 stocks
Genuine Parts Co
GPC
▲ PositiveCapitalrelevance

O'Reilly reportedly made a roughly $10 billion bid for Genuine Parts' NAPA Auto Parts business, a potential M&A event for the company.

O’Reilly Automotive Inc
ORLY
▲ PositiveCapitalrelevance

O'Reilly reportedly bid roughly $10 billion for Genuine Parts' NAPA business, an M&A move that would expand its professional repair-shop reach.