Two of our Value Authority stocks announced quarterly results, with one missing estimates and one beating expectations. Let’s take a closer look at both reports now.

Sonoco Products (SON) reported fourth-quarter EPS of $1.02, vs. $1.27 last year, which was $0.02 lower than expectations. However, a sales decline of 2% was better than the expected 4% decline. Gross profit rose in the fourth quarter, aided by pricing and productivity gains, but higher employee and interest expenses cut into profitability.

EPS guidance of $5.10 to $5.40 for 2024 compared to expectations of $5.35 for the whole year. While this on the surface may seem disappointing, I believe investors have noted the company’s improved free cash flow, along with the fact that the stock is very inexpensive, and earnings are hanging in despite a difficult manufacturing environment. So, the stock is up over 3% today on an overall good day from small-cap value stocks.

Trading at less than 12X reasonable earnings expectations for 2024, and with a dividend yield of 3.6%, SON has quite favorable risk-versus-reward characteristics. SON is a buy below $60. My target is $70.

Genuine Parts (GPC) is down approximately 2% this morning after reporting first-quarter EPS of $2.26, which represented a 10% year-over-year increase and was slightly above expectations. However, investors took note of the continued weakness in its North American auto business, where comparable store sales were down 2.7%. This increased concerns that the company is losing market share to rival O’Reilly (ORLY).

On the conference call, management said that the first two months of the fourth quarter for its automotive business were in line with expectations, but warm weather in December hurt results. In order to improve the situation, the company maintained their business would drive improvements, given new management at NAPA, investments in technology and the purchase of more independent stores. Management noted that there was already an improvement in results in January.

Meanwhile, results in its industrial business remain strong, with operating profit up 18% in the quarter, and improved manufacturing activity could help this segment in 2024. Overall, GPC believes EPS should rise from $9.33 in 2023 to between $9.70 and $9.90 in 2024.

Trading at approximately 14.2X 2024 EPS estimates, the stock should do very well if Genuine Parts can stabilize its North American auto business, and I think they will be able to do so. GPC remains a buy below $136. My target is $160.