Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Genuine Parts Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.3% to 6.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 35, DPO 140, DIO 124). At a 6.8% WACC with mid-year discounting, the terminal value (78% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.0x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $205.45 per share, suggesting GPC is undervalued by 94.9% at the current price of $105.42.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 1,874 | 1,944 | 2,049 | 2,170 | 2,312 | 2,369 |
| (−) Net Interest | 103 | 107 | 112 | 119 | 127 | 130 |
| (+) D&A | 431 | 474 | 507 | 510 | 508 | 521 |
| EBITDA | 2,407 | 2,525 | 2,668 | 2,799 | 2,946 | 3,020 |
| (−) Tax | 266 | 276 | 291 | 308 | 329 | — |
| (−) CapEx | 483 | 501 | 528 | 559 | 595 | — |
| (−) ΔWC | -678 | 64 | 96 | 111 | 130 | — |
| Free Cash Flow (FCF) | 2,336 | 1,684 | 1,753 | 1,821 | 1,893 | — |
| Peers' EBITDA Multiple | 13.0x | |||||
| Terminal Value | 39,382 | |||||
| WACC / Discount Rate | 6.83% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 2,260 | 1,525 | 1,486 | 1,445 | 1,406 | 28,296 |
| Enterprise Value | 36,417 | |||||
| Projection Period | 8,121 | 22.3% | ||||
| Terminal Value | 28,296 | 77.7% | ||||
| (−) Current Net Debt | 7,798 | |||||
| Equity Value | 28,620 | |||||
| (÷) Outstanding Shares | 139M | |||||
| Fair Price | $206 | +95.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.0x | 11.0x | 13.0x | 15.0x | 17.0x |
|---|---|---|---|---|---|
| 4.8% | $160 | $194 | $228 | $262 | $297 |
| 5.8% | $151 | $184 | $217 | $249 | $282 |
| 6.8% | $143 | $174 | $205 | $237 | $268 |
| 7.8% | $135 | $165 | $195 | $225 | $254 |
| 8.8% | $128 | $157 | $185 | $213 | $242 |
Current price: $105.42. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.