MW This auto-parts maker is jumping on the breakup bandwagon. Here's why the stock is tanking.

By Tomi Kilgore

Genuine Parts shares lead the S&P 500's decliners, as a big profit miss distracts investors from plans to separate into two businesses

Genuine Parts shares tumbled Tuesday after a big earnings miss overshadowed breakup plans.

Shares of Genuine Parts tanked on Tuesday after the auto-parts seller missed quarterly profit expectations by a wide margin and provided a disappointing 2026 outlook, due in part to weakness in its domestic NAPA business.

The stock's $(GPC)$ selloff also comes in the face of another company announcement, which investors would have normally cheered. The company said that after an extensive review, it has decided to separate into two publicly traded companies. One company would be for automotive parts, which includes its NAPA business, and the other would be for industrial parts, which includes the Motion brand.

Breakups like this tend to boost share price because - as Genuine Parts said in September 2025 - they come after a company realizes that the share price at the time didn't reflect the true value of its businesses. A separation would help unlock that value by allowing investors to get a true sense of the worth of each business without distractions from the other ones.

But Genuine Parts' stock tumbled 13.2% in recent midday trading Tuesday, enough to pace the S&P 500 index's SPX decliners. The stock was also headed for its worst day since a record 21% tumble on Oct. 22, 2024.

The reason for the selloff was that the company swung to a fourth-quarter loss of $609.5 million from net income of $133.1 million a year ago, due primarily to a charge related to the termination of the pension plan. Excluding nonrecurring items such as that charge, adjusted earnings per share slipped to $1.55 from $1.61, well below the average analyst EPS estimate compiled by FactSet of $1.82.

Sales for the quarter rose 4.1% to $6 billion, just shy of the FactSet consensus of $6.06 billion.

And for 2026, the company expects adjusted EPS of $7.50 to $8, compared with the current FactSet consensus of $8.43.

The misses accentuate why the company is looking to join the breakup trend, which has been accelerating amid a lighter regulatory environment and an effort to cut overall costs through streamlining, and as the fear of falling behind the competition has increased.

According to a McKinsey & Co. report out last week, the overall value of breakups in 2025, in the form of spinoffs, split-offs, carve-outs and asset sales, jumped 30% from a year ago to $1.6 trillion, the highest level since 2021.

Kraft Heinz $(KHC)$ was among the companies that announced breakup plans last year, although it said last week it was putting those plans on hold to focus on fixing its sales problems first. Honeywell $(HON)$ said in February 2025 that it was splitting into three companies, and Johnson & Johnson $(JNJ)$ announced plans in October 2025 to separate its orthopedics business.

Genuine Parts CEO Will Stengel on Tuesday described the reason for the split this way: "Creating two focused, independent companies sharpens customer and market alignment, increases clarity and speed, simplifies operations and enables disciplined, business-specific investments to unlock long-term value."

The company's automotive business had $15 billion in sales in 2025, and the industrial business had $9 billion in sales.

The split is expected to be completed in the first quarter of 2027.

Genuine Parts shares have still gained 2.3% over the past 12 months, while the State Street Consumer Discretionary Select Sector SPDR exchange-traded fund XLY, of which Geniune Parts is a component, has edged up 1.4% and the S&P 500 has advanced 11.6%.

-Tomi Kilgore

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February 17, 2026 13:26 ET (18:26 GMT)

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