Mizuho sees a low likelihood of O'Reilly Automotive (ORLY) acquiring Genuine Parts' (GPC) auto parts arm. Bloomberg earlier today reported that Genuine Parts has attracted a cash bid for its auto parts unit from O'Reilly. Mizuho sees a "very low likelihood" of O'Reilly taking on all of Genuine's domestic Napa business or even parts of its international portfolio, given the different distribution network and large number of independently owned stores. Genuine Parts' North America automotive segment, despite $10B in annual sales, operates at a sub-10% EBITDA margin versus O'Reilly's "consistently above" 20%, the analyst tells investors in a research note. The firm has an Outperform rating on O'Reilly shares with a $110 price target. The stock closed Thursday down 3% t0 $90.25.
