Genuine Parts Skyrockets 5.75% Intraday, Can This Bull Run Sustain Amid Tariff Turmoil?

Summary
• Genuine Parts (GPC) surges 5.75% to $131.01, hitting an intraday high of $131.365
• Q2 sales climb 3.4% to $6.2B, but 2025 guidance slashed to 1-3% revenue growth
• Adjusted EPS at $2.10, below $2.44 in 2024

The stock's sharp intraday rally follows a mixed earnings report and revised outlook, with Genuine Parts navigating tariff uncertainties while maintaining a positive revenue trajectory. The automotive parts giant's stock has traded between $122.35 and $131.365, reflecting both strategic cost-cutting and market anxieties about trade policies.

Tariff Warnings and Strategic Restructuring Drive Volatility
Genuine Parts' 5.75% intraday surge reflects a complex interplay of earnings performance and strategic adjustments against a backdrop of tariff uncertainty. While Q2 sales grew 3.4% to $6.2 billion, the company slashed its 2025 guidance to 1-3% revenue growth from 2-4%, citing U.S. tariff impacts and inflationary pressures. The automotive segment showed resilience with 5% sales growth, but EBITDA margins contracted 110 basis points to 8.6%. The stock's rally appears to be a mix of short-term relief from in-line earnings and speculative positioning against a backdrop of supply chain adjustments and global restructuring efforts.

Automotive Parts Sector Rally as Advance Auto Parts Leads
The automotive parts sector is showing mixed signals as Genuine Parts' 5.75% gain contrasts with broader market uncertainties. Advance Auto Parts (AAP), the sector's benchmark, is up 1.24% intraday, suggesting industry-wide optimism about supply chain adjustments. While Genuine Parts faces specific tariff-related headwinds, the sector's overall performance indicates investors are still valuing companies that can navigate global supply chain complexities through strategic restructuring.

Options Playbook: Leveraging Volatility with GPC20250815C130 and GPC20250815P125
• 200-day average: 122.05 (below current price)
• RSI: 57.11 (neutral zone)
• MACD: 0.17 (bullish divergence), Histogram: -0.15 (bearish)
• Bollinger Bands: Upper at 128.66, Middle at 123.51, Lower at 118.37
• Support/Resistance: 30D support at 125.23, 200D resistance at 116.97

The technical setup shows Genuine Parts trading above its 200-day moving average with RSI in the neutral zone, suggesting potential for continuation. The MACD's bearish histogram contrasts with the positive MACD line, creating a mixed signal. The stock is trading near the upper Bollinger Band, indicating stretched volatility. With $2 billion in undrawn credit and a 23.38 P/E ratio, the stock remains attractively valued despite the tariff-driven guidance cut.
Top Option 1: GPC20250815C130
• Code: GPC20250815C130
• Type: Call
• Strike Price: $130
• Expiration: 2025-08-15
• IV: 18.47% (moderate)
• Leverage Ratio: 40.99%
• Delta: 0.588 (moderate sensitivity)
• Theta: -0.079 (rapid time decay)
• Gamma: 0.061 (high sensitivity to price changes)
• Turnover: 21,115

This call option offers a balanced risk-reward profile with moderate delta and high gamma, making it ideal for capitalizing on continued upward momentum while benefiting from the stock's elevated volatility.
Top Option 2: GPC20250815P125
• Code: GPC20250815P125
• Type: Put
• Strike Price: $125
• Expiration: 2025-08-15
• IV: 26.59% (high)
• Leverage Ratio: 104.11%
• Delta: -0.229 (moderate downside protection)
• Theta: -0.039 (moderate time decay)
• Gamma: 0.033 (reasonable sensitivity)
• Turnover: 8,690

The put option provides downside protection with high leverage potential, ideal for hedging against a pullback while maintaining exposure to the stock's core fundamentals.
Payoff Scenario: Assuming a 5% upside to $137.56, the call option would yield max(0, 137.56 - 130) = $7.56 per contract, while the put option would expire worthless. This creates a directional bias favoring bullish positioning.
Trading View: Aggressive bulls should consider GPC20250815C130 as a core holding into a potential breakout above $130, while hedgers might pair this with GPC20250815P125 to protect against a pullback to key support levels.

Backtest Genuine Parts Stock Performance
The backtest of GPC's performance after a 6% intraday surge shows mixed results. While the 3-Day win rate is 49.77%, the 10-Day win rate is slightly higher at 53.81%, and the 30-Day win rate is 53.34%, indicating a moderate likelihood of positive returns in the short term. However, the maximum return during the backtest period is only 1.99%, which suggests that while there is a chance of gains, the potential upside is limited.

Position for the Long Game: Watch for $125 Support and $135 Resistance
Genuine Parts' 5.75% intraday surge reflects a mix of strategic cost-cutting and market optimism about its global restructuring efforts, despite revised 2025 guidance. The stock's technical setup suggests a continuation pattern with key support at $125 and resistance at $135. Investors should monitor the 200-day moving average at $122.05 as a critical level for trend confirmation. With Advance Auto Parts (AAP) gaining 1.24% and the automotive sector showing mixed signals, the market is pricing in a balance between near-term uncertainties and long-term operational improvements. For those with a directional bias, the GPC20250815C130 call offers a high-gamma play on continued momentum, while the GPC20250815P125 put provides downside protection. Watch for a decisive move above $135 or a breakdown below $125 to determine the next phase of this trade.