Category: XPO

XPO – XPO Logistics Shares: $110 Target From Barclays

  • The shares of XPO Logistics Inc (NYSE: XPO) have received a price target of $110 from Barclays. These are the details.

The shares of XPO Logistics Inc (NYSE: XPO) have received a price target of $110 from Barclays. And Barclays analyst Brandon Oglenski is maintaining an “Overweight” rating on the shares.

Oglenski had lowered the price target from $180 in order to account for the spinoff of GXO Logistics (GXO). Oglenski noted that with the contract logistics operations now separate from XPO’s main transportation businesses, management can now focus on market growth in the large less-than-truckload (LTL) and brokerage businesses in North America

Plus Oglenski sees the free cash flow profile of the business improvement in the future. XPO had completed the spin-off of its global logistics segment as GXO Logistics on August 2.

Brad Jacobs, XPO’s chief executive officer, will continue as the chairman. And AnnaMaria DeSalva and Michael Jesselson will remain in the roles of vice chairman and lead independent director, respectively, and Adrian Kingshott will continue to serve as a director.

Plus XPO appointed 4 new board members, replacing directors who resigned from the XPO board to join the GXO board. The new XPO directors are Jason Aiken (CFO of General Dynamics Corporation), Mary Kissel (EVP and senior policy advisor with Stephens), Allison Landry (former senior transportation research analyst with Credit Suisse), and Johnny C. Taylor, Jr. (CEO of the Society of Human Resources Management).

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.

XPO – XPO Logistics (XPO) Stock Sinks As Market Gains: What You Should Know

XPO Logistics (XPO Free Report) closed the most recent trading day at $140.32, moving -1.98% from the previous trading session. This change lagged the S&P 500’s 0.2% gain on the day.

Heading into today, shares of the freight management company had lost 3.47% over the past month, lagging the Transportation sector’s loss of 1.55% and the S&P 500’s gain of 3.28% in that time.

Investors will be hoping for strength from XPO as it approaches its next earnings release, which is expected to be July 28, 2021. On that day, XPO is projected to report earnings of $1.71 per share, which would represent year-over-year growth of 371.43%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.86 billion, up 38.86% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.32 per share and revenue of $19.45 billion, which would represent changes of +214.43% and +19.67%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for XPO. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.29% higher. XPO currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that XPO has a Forward P/E ratio of 22.64 right now. For comparison, its industry has an average Forward P/E of 18.69, which means XPO is trading at a premium to the group.

Meanwhile, XPO’s PEG ratio is currently 1.89. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. Transportation – Services stocks are, on average, holding a PEG ratio of 1.22 based on yesterday’s closing prices.

The Transportation – Services industry is part of the Transportation sector. This group has a Zacks Industry Rank of 56, putting it in the top 23% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

XPO – The Next Big Thing in E-Commerce Hits Wall Street Next Month

XPO Logistics (NYSE:XPO) has set the date for its long-awaited split, announcing GXO Logistics will begin trading on August 2.

The split is a huge moment in the history of one of the transportation sector’s top performing stocks this century, and it should create some intriguing opportunities. Although investors don’t often focus on logistics when it comes to e-commerce, I believe GXO is one of the best ways to invest in the expected growth of online and omnichannel shopping.

Here’s why investors should be paying close attention as GXO splits off from XPO.

Meet GXO Logistics

GXO is a provider of contract logistics, running warehouses and managing deliveries and returns for retailers, e-commerce merchants, and other large companies. GXO has set itself up as the answer to one of the biggest challenges retailers face when competing with Amazon.com. Few companies have the scale to match Amazon’s shipping and warehousing heft on their own, but combined, under the management of GXO, merchants can get the sort of economies of scale that Amazon uses to its advantage.

GXO, in short, is the behind-the-scenes machinery that makes e-commerce work. The stock allows investors to benefit from the expected continued growth in e-commerce without having to pick winners and losers among individual retail stocks.

Interior shot of an XPO sorting facility.

Image source: XPO Logistics.

The company has other huge tailwinds at its back. GXO should benefit from a pre-pandemic trend toward large companies outsourcing their logistics operation that has only gained urgency due to COVID, and from the efficiencies that come through warehouse automation. XPO had been spending $500 million annually on tech prior to the split, and much of that has gone into automation.

GXO operates from 885 locations, primarily in North America and Europe, and counts blue chip companies including Apple, Nike, Walt Disney, Nestle, Pepsico, and Whirlpool among its customers. Its twenty largest customers have been doing business with the new GXO for an average of 15 years, and no one customer accounts for more than 4% of total revenue.

Company officials expect to generate 17% adjusted EBITDA growth and 10% revenue growth through 2022. Today about 40% of its revenue comes from pure-play e-commerce and omnichannel retailers, and the company said it has a $2 billion pipeline of new potential business on the horizon.

GXO is one of the largest pure-play contract logistics companies operating worldwide, but it still has a lot of growth potential. The company generated $6.6 billion in revenue in the last twelve months, a small piece of a $130 billion addressable market of outsourced logistics. Add in-house logistics, some of which is likely to be outsourced in the years to come, and the entire North American and European potential market is more than $430 billion.

The trucking business is ready to hit the fast lane

Terms of the split call for XPO holders as of July 23 to receive one share of GXO stock for every share they own. The remaining XPO, while not as sexy as the e-commerce focused business, also has the potential to outperform.

The “new” XPO will be comprised of the current company’s transportation segment, which generated more than $10 billion in revenue over the past twelve months. It ranks as the third largest provider of less-than-truckload (LTL) services in North America, the complicated business of operating trucks for multiple customers instead of filling a truck with goods from one customer. It is also the largest truck brokerage in North America, and a top provider of last mile logistics, and has a large European operation as well.

Part of the rationale behind the split was to reshuffle debt and leave this trucking business with an investment-grade rating and a lot of flexibility. XPO was built on acquisitions, growing revenue by 17,000% during a 10-year period ending in 2015, and propelling the stock into one of the market’s best performers over the last fifteen years. Post-split the remaining XPO will have the flexibility, and the balance sheet, to once again look at both organic and inorganic expansion opportunities.

XPO Chart

XPO data by YCharts

Two stocks with great potential

I’ve long been a fan of XPO, impressed by the work of rollup specialist Brad Jacobs as he first assembled and then managed this transportation behemoth. But the market hasn’t been nearly as enthused of late, with XPO shares trailing the S&P 500 by more than 10 percentage points over the last three years.

The split is designed to rekindle Wall Street’s interest in XPO, and remove the so-called “conglomerate discount” by giving investors two more focused, pure-play companies to consider. XPO today trades at an enterprise value about 11 times expected EBITDA.

The hope is that post-split the trucking business can command a valuation similar to rival Old Dominion Freight Line‘s 19 times forward EBITDA multiple, and GXO will trade at a multiple closer to the 17x that European pure-play contract logistics businesses have sold for or at least C.H. Robinson Worldwide‘s 13x valuation.

Jacobs is hanging around, intending to remain as CEO of XPO while taking the added title of chairman of GXO’s board. This is still a founder-owned business, with Jacobs owning about 13% of XPO shares.

XPO’s stock hasn’t performed of late, but this is still an impressive collection of assets with clear growth trajectories. It is unlikely either of these stocks have a run that matches XPO’s growth over the last decade, but both of these businesses are set up well to be outperformers for years to come. Current XPO shareholders should continue on for a ride, and as of August new investors will have both an e-commerce specialist and a trucker to consider.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

XPO – XPO Logistics (XPO) Stock Moves -0.72%: What You Should Know

XPO Logistics (XPO Free Report) closed at $140 in the latest trading session, marking a -0.72% move from the prior day. This change was narrower than the S&P 500’s 0.75% loss on the day.

Prior to today’s trading, shares of the freight management company had lost 3.77% over the past month. This has lagged the Transportation sector’s loss of 3.14% and the S&P 500’s gain of 2.74% in that time.

Investors will be hoping for strength from XPO as it approaches its next earnings release, which is expected to be July 28, 2021. In that report, analysts expect XPO to post earnings of $1.71 per share. This would mark year-over-year growth of 371.43%. Meanwhile, our latest consensus estimate is calling for revenue of $4.86 billion, up 38.86% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.32 per share and revenue of $19.45 billion. These totals would mark changes of +214.43% and +19.67%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for XPO. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.62% higher. XPO is currently a Zacks Rank #3 (Hold).

Looking at its valuation, XPO is holding a Forward P/E ratio of 22.3. This valuation marks a premium compared to its industry’s average Forward P/E of 19.3.

Meanwhile, XPO’s PEG ratio is currently 1.86. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. The Transportation – Services was holding an average PEG ratio of 1.22 at yesterday’s closing price.

The Transportation – Services industry is part of the Transportation sector. This industry currently has a Zacks Industry Rank of 63, which puts it in the top 25% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow XPO in the coming trading sessions, be sure to utilize Zacks.com.

XPO – XPO Logistics Completes Squeeze-Out Process for XPO Logistics Europe

GREENWICH, Conn., June 10, 2021 (GLOBE NEWSWIRE) —  XPO Logistics, Inc. (NYSE: XPO) has completed the previously announced buy-out offer and squeeze-out for the remaining 3% of XPO Logistics Europe, SA shares that it did not already own. The French Autorité des marches financiers set the effective date of the squeeze-out as June 4, 2021. The former minority shareholders of XPO Logistics Europe have and will receive, as part of the buy-out offer and the subsequent squeeze-out, a payment of €315 per share, resulting in a total cash consideration of approximately €108 million.

The transaction was supported by the Supervisory Board of XPO Logistics Europe and approved by the French Autorité des marches financiers. Trading of XPO Logistics Europe shares on Euronext Paris was discontinued on May 27, 2021.

About XPO Logistics

XPO Logistics, Inc. (NYSE: XPO) provides cutting-edge supply chain solutions to the most successful companies in the world, with two business segments: transportation and logistics. The company helps more than 50,000 customers manage their supply chains most efficiently, using a network of 1,621 locations in 30 countries and approximately 140,000 team members, including 108,000 employees and 32,000 temporary workers. The company’s corporate headquarters are in Greenwich, Conn. Visit xpo.com for more information, and connect with XPO on Facebook, Twitter, LinkedIn, Instagram and YouTube

Contacts
XPO Logistics, Inc.
Tavio Headley
+1-203-413-4006
tavio.headley@xpo.com

XPO Logistics Europe
Anne Lafourcade
+33 (0)6 75 22 52 90
anne.lafourcade@xpo.com

XPO – XPO Logistics Announces Public Filing of Form 10 Registration Statement for Planned Spin-Off of GXO Logistics

Raises full year 2021 guidance for adjusted EBITDA

Provides 2022 guidance for GXO, including year-over-year adjusted EBITDA growth of 14% to 20%

Targets third quarter 2021 completion of spin-off

Announces Investor Days in New York and London

GREENWICH, Conn., June 09, 2021 (GLOBE NEWSWIRE) —  XPO Logistics, Inc. (NYSE: XPO), a leading global provider of supply chain solutions, today announced the filing of a public Form 10 registration statement for GXO Logistics with the U.S. Securities and Exchange Commission. The Form 10 was filed in connection with XPO’s planned spin-off of its logistics segment into a separate publicly traded company. XPO expects to complete the spin-off in the third quarter of 2021, with GXO trading on the New York Stock Exchange, and is pursuing an investment-grade rating for both companies — GXO from day one, and XPO to follow.

In addition, the company filed supplementary financial information for GXO and XPO post spin-off. The Form 10 and supplementary financial information are available on the company’s website at xpo.com/investors.

Brad Jacobs, chairman and chief executive officer of XPO Logistics, said, “GXO’s Form 10 public filing is a key step forward in our spin-off plan. The separation will create two pure-play powerhouses in the supply chain industry, XPO in transportation and GXO in logistics, each with enhanced prospects for growth.”

Malcolm Wilson, chief executive officer of XPO Logistics Europe and planned CEO of GXO, said, “GXO will have accelerated momentum out of the gate as an independent company, as reflected in the strong 2022 guidance we issued today. Our growth is being driven by customer demand for outsourcing and for two areas of logistics where we hold leading positions — warehouse automation and e-commerce.”

Raises Full Year 2021 Guidance for Adjusted EBITDA

XPO has increased its expectation for Q2 2021 adjusted EBITDA to at least $490 million, driven by stronger-than-expected performance in its transportation segment. Consequently, the company has increased its outlook for full year 2021 adjusted EBITDA to at least $1.845 billion to $1.895 billion, compared with the prior guidance of $1.825 billion to $1.875 billion.

The new range for 2021 adjusted EBITDA reflects a year-over-year increase of 32% to 36% above 2020, comprised of:

  • 28% to 32% growth in adjusted EBITDA in the logistics segment
  • 32% to 36% growth in adjusted EBITDA in the transportation segment

Provides Full Year 2022 Guidance for GXO

The company has issued the following full year preliminary 2022 guidance for GXO, the planned spin-off of its logistics segment, assuming a 2021 separation:

  • Organic revenue growth of 8% to 12% above pro forma 2021
  • Adjusted EBITDA of $700 million to $735 million, reflecting year-over-year growth of 14% to 20% above pro forma 2021
  • Adjusted EBITDAR of approximately $1.5 billion

Announces Investor Days

The company plans to hold an Investor Day to discuss the GXO spin-off on Tuesday, July 13, 2021 in New York, and in London on a date to be announced as air travel restrictions allow.

Unveils GXO.com

The company has launched a new website that provides insight into GXO’s best-in-class capabilities by vertical and service offering. Investors, customers and the media can register for automatic updates on the latest GXO news and progress of the spin-off at gxo.com.

About the GXO Spin-Off

XPO expects to spin off its logistics segment in the third quarter of 2021 as GXO Logistics, creating two, pure-play industry powerhouses. The separation would create two independent public companies with distinct investment identities and service offerings in vast addressable markets. GXO would be the second largest contract logistics company in the world, and XPO would be a leading provider of transportation services, primarily less-than-truckload transportation and truck brokerage. Completion of the spin-off is subject to various conditions, and there can be no assurance that the transaction will occur or, if it does occur, of its terms or timing. For more information, visit gxo.com.

About XPO Logistics

XPO Logistics, Inc. (NYSE: XPO) provides cutting-edge supply chain solutions to the most successful companies in the world, with two business segments: transportation and logistics. The company helps more than 50,000 customers manage their supply chains most efficiently, using a network of 1,621 locations in 30 countries and approximately 140,000 team members, including 108,000 employees and 32,000 temporary workers. The company’s corporate headquarters are in Greenwich, Conn., USA, and its European headquarters are in Lyon, France. Visit xpo.com for more information, and connect with XPO on Facebook, Twitter, LinkedIn, Instagram and YouTube.

Non-GAAP Financial Measures

As required by the rules of the Securities and Exchange Commission (“SEC”), we provide reconciliations of the non-GAAP financial measures contained in this press release to the most directly comparable measure under GAAP, which are set forth in the financial tables attached to this release.

XPO’s and GXO’s non-GAAP financial measures used in this release include: adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) and adjusted earnings before interest, taxes, depreciation, amortization and rent expense (“adjusted EBITDAR”).

Adjusted EBITDA includes adjustments for transaction and integration, as well as restructuring costs and other adjustments as set forth in the attached tables. Transaction and integration adjustments are generally incremental costs that result from an actual or planned acquisition, divestiture or spin-off and may include transaction costs, consulting fees, retention awards, and internal salaries and wages (to the extent the individuals are assigned full-time to integration and transformation activities) and certain costs related to integrating and converging IT systems. Restructuring costs primarily relate to severance costs associated with business optimization initiatives. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and evaluating XPO’s, GXO’s and each business segment’s ongoing performance.

Adjusted EBITDAR excludes rent expense from Adjusted EBITDA and is useful to management and investors in evaluating GXO’s performance because adjusted EBITDAR considers the performance of GXO’s operations, excluding decisions made with respect to capital investment, financing and other non-recurring charges. Adjusted EBITDAR is also a measure commonly used by management, research analysts and investors to value companies in the logistics industry. Since adjusted EBITDAR excludes interest expense and rent expense, it allows management, research analysts and investors to compare the value of different companies without regard to differences in capital structures and leasing arrangements.

With respect to XPO’s full year 2021 financial targets for adjusted EBITDA and GXO’s full year 2022 financial targets for adjusted EBITDA and adjusted EBITDAR, a reconciliation of these non-GAAP measures to the corresponding GAAP measures is not available without unreasonable effort due to the variability and complexity of the reconciling items described above that we exclude from these non-GAAP target measures. The variability of these items may have a significant impact on our future GAAP financial results and, as a result, we are unable to prepare the forward-looking statement of income and statement of cash flows prepared in accordance with GAAP that would be required to produce such a reconciliation.

Forward-looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, including the statements above regarding plans, benefits and timing of the contemplated spin-off transaction. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,”
“will,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target,” “trajectory” or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by the company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors the company believes are appropriate in the circumstances.

These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to a material difference include the risks discussed in our filings with the SEC and the following: economic conditions generally; the severity, magnitude, duration and aftereffects of the COVID-19 pandemic and government responses to the COVID-19 pandemic; our ability to align our investments in capital assets, including equipment, service centers and warehouses, to our customers’ demands; our ability to implement our cost and revenue initiatives; our ability to successfully integrate and realize anticipated synergies, cost savings and profit improvement opportunities with respect to acquired companies; matters related to our intellectual property rights; fluctuations in currency exchange rates; fuel price and fuel surcharge changes; natural disasters, terrorist attacks or similar incidents; risks and uncertainties regarding the potential timing and expected benefits of the proposed spin-off of our logistics segment, including final approval for the proposed spin-off and the risk that the spin-off may not be completed on the terms or timeline currently contemplated, if at all; the impact of the proposed spin-off on the size and business diversity of our company; the ability of the proposed spin-off to qualify for tax-free treatment for U.S. federal income tax purposes; our ability to develop and implement suitable information technology systems and prevent failures in or breaches of such systems; our substantial indebtedness; our ability to raise debt and equity capital; fluctuations in fixed and floating interest rates; our ability to maintain positive relationships with our network of third-party transportation providers; our ability to attract and retain qualified drivers; labor matters, including our ability to manage our subcontractors, and risks associated with labor disputes at our customers and efforts by labor organizations to organize our employees; litigation, including litigation related to alleged misclassification of independent contractors and securities class actions; risks associated with our self-insured claims; risks associated with defined benefit plans for our current and former employees; and governmental regulation, including trade compliance laws, as well as changes in international trade policies and tax regimes; governmental or political actions, including the United Kingdom’s exit from the European Union; and competition and pricing pressures.

All forward-looking statements set forth in this release are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on us or our business or operations. Forward-looking statements set forth in this release speak only as of the date hereof, and we do not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, except to the extent required by law.

Investor Contact
XPO Logistics, Inc.
Tavio Headley

+1-203-413-4006

tavio.headley@xpo.com

Media Contact
XPO Logistics, Inc.
Joe Checkler

+1-203-423-2098

joe.checkler@xpo.com

XPO – XPO Logistics and Barilla Expand Partnership with Customized E-commerce Logistics for “Dedicato a Te” Website

GREENWICH, Conn., June 08, 2021 (GLOBE NEWSWIRE) —  XPO Logistics, Inc. (NYSE: XPO), a leading global provider of transportation and logistics services, has signed a new contract with Barilla, an Italian multinational food company and the world’s largest pasta manufacturer. XPO will manage the supply chain for Barilla’s “Dedicato a Te” (“Dedicated to You”) new e-commerce platform in Italy. The agreement extends the partnership that began in 2018 with XPO’s management of logistics and transportation activities for the “CucinaBarilla” online service.

Barilla’s “Dedicato a Te” website offers consumers the unique ability to customize the packaging of Mulino Bianco and Pan di Stelle products online with names, photos and dedications of their choice. XPO has been entrusted with the logistics and transportation activities for order fulfilment, drawing on extensive expertise in the e-commerce and food sectors. Barilla is benefitting from synergies with XPO’s management of CucinaBarilla logistics, including a dedicated team and tailored technology.

XPO will manage fulfillment for “Dedicato a Te” at the Trezzo sull’Adda warehouse where CucinaBarilla’s supply chain is based. The warehouse is operated with strict adherence to HACCP regulations, with XPO responsible for the storing of food and non-food products, kitting customized packaging and packing orders, as well as delivery to consumers.

Alfredo Baldassarre, project manager for Barilla, said, “When it came time to launch our new, custom e-commerce service, we chose XPO as our logistics partner. The XPO team’s expertise in logistics for the e-commerce and food industries played a key role in this decision.”

Ube Gaspari, managing director, supply chain – Italy, XPO Logistics, said, “We’re proud to be extending our partnership with Barilla, a prestigious global market leader. Dedicato a Te is an innovative concept that gives consumers a unique e-commerce experience. We’re supporting the growth of this new endeavor with an end-to-end solution for our customer.”

About XPO Logistics
XPO Logistics, Inc. (NYSE: XPO) provides cutting-edge supply chain solutions to the most successful companies in the world. The company is the second largest contract logistics provider and the second largest freight broker globally, and a top three less-than-truckload provider in North America. XPO uses a highly integrated network of 1,621 locations in 30 countries to serve more than 50,000 customers. Approximately 140,000 team members, including 108,000 employees and 32,000 temporary workers, help XPO’s customers manage their supply chains most efficiently. The company’s corporate headquarters are in Greenwich, Conn., USA, and its European headquarters are in Lyon, France. Visit xpo.com for more information, and connect with XPO on FacebookTwitterLinkedInInstagram and YouTube

Media Contact
XPO Logistics, Inc.
Joe Checkler
+1-203-423-2098
joe.checkler@xpo.com

XPO Logistics Europe
Anne Lafourcade
anne.lafourcade@xpo.com
+33 (0)6 75 22 52 90

XPO – This Transportation Stock Has Outperformed Big Tech Over the Past Decade

Growth-oriented investors tend to focus on tech stocks, and with good reason. Some of the biggest names in tech have been overachievers in recent years, delivering substantial returns.

But you can find high-growth companies outside of tech. On this clip from Motley Fool Liverecorded on May 6, Fool.com contributor Lou Whiteman identifies XPO Logistics (NYSE:XPO) as a market beater and explains why he believes that outperformance will continue in the years to come.

 

Lou Whiteman: XPO Logistics, one of my favorite companies to talk about, and I’m going to convince you why that is. Earlier this week, first-quarter earnings, oy, did they “deliver.” See what I did there? The company earned $1.46 per share, $0.50 above the $0.97 consensus, and that consensus was way up because I don’t know if you’ve noticed, but with the pandemic, delivery companies, shipment companies have done really well. They raised full-year guidance too. This is a company, an old economy company, that now expects 2021 adjusted EBITDA to be up more than 30% over 2020. On a per-share basis, the low end of their guidance is $0.40 above the consensus estimate, even with raised expectations they are killing it right now.

So what’s going on? First, XPO spends about $500 million annually on tech and it seems to be paying off. XPO Connect is a product that’s almost like Match Group (NASDAQ:MTCH) for truckers which, I don’t know. [LAUGHTER] If you imagine, you have a lot of truckers who try to avoid not having a full truck whenever they’re on the road. You have a lot of shippers that are looking to get things from point A to point B using technology to bring them together. This is a very sticky offering. Truck brokerage revenue was up 83% year over year. They are also investing in automation and warehousing, which is leading to faster fulfillment times, better efficiency. This is a well-run company.

Secondly, as I mentioned, we had a pandemic. We were doing a lot of e-commerce, subsequent need from delivery capacity. What’s going on behind the scenes is that the pandemic accelerated this trend on the corporate side of looking to outsource warehousing and outsource logistics due to its complexity and because of the vulnerabilities in the system. XPO is a huge player here. Their scale, their automation, it allows them to manage these tasks cheaper than their customers can on their own. The company has brought in more than $4 billion in new customer agreements so far in 2021. One of their new customers, you might have heard of a company called Apple (NASDAQ:AAPL), who is partnering with XPO to build a new distribution center in Indiana.

I know, still, this is just a logistics company and that bores people and I get that and we’ll see if I can share my screen here, because this is why you should care. Tell me if this comes up. This is a 10-year chart comparing XPO’s performance with Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), Apple, and Microsoft (NASDAQ:MSFT). It’s done pretty darn well. There are special companies all over the stock market. Not every logistics company does this, but it’s not just a tech thing to get an over-performance. XPO is one of the special stories, special companies, there’s a lot to like from here. They are actually splitting off this logistics and e-commerce business from the trucking company. It’s going to be a pure-play for all the growth. For all of the boring old industrial that this looks like, I’d argue we’re in the early stages of a huge opportunity here, and XPO is the best way to play it. Everyone should have this on their radar screen. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.