Citi has increased its price target for GXO Logistics (GXO, Financial) from $56 to $59 while maintaining a Buy rating on the stock. The firm highlights a balanced risk and reward scenario for transport stocks as second-quarter reports approach, amidst ongoing macroeconomic uncertainties and a persistently weak demand environment. However, Citi expresses a more cautious stance on the sector compared to three months ago, largely due to the recent surge in stock prices.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 17 analysts, the average target price for GXO Logistics Inc (GXO, Financial) is $53.70 with a high estimate of $67.00 and a low estimate of $35.00. The average target implies an upside of 6.89% from the current price of $50.24. More detailed estimate data can be found on the GXO Logistics Inc (GXO) Forecast page.
Based on the consensus recommendation from 17 brokerage firms, GXO Logistics Inc's (GXO, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for GXO Logistics Inc (GXO, Financial) in one year is $70.31, suggesting a upside of 39.95% from the current price of $50.24. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the GXO Logistics Inc (GXO) Summary page.
GXO Key Business Developments
Release Date: May 08, 2025
- Revenue: $3 billion, up 21% year-over-year.
- Adjusted EBITDA: $163 million.
- Net Loss: $95 million, primarily due to a one-time charge related to a regulatory matter and transaction and restructuring costs.
- Adjusted Net Income: $34 million.
- Free Cash Flow Conversion Target: 25% to 35% of adjusted EBITDA for the full year.
- Operating Return on Invested Capital: 45%, including Wincanton, up 12 percentage points from Q1 2024.
- Share Buyback: 2.8 million shares purchased, representing 2.4% of shares outstanding.
- New Business Wins: $228 million in the quarter.
- Sales Pipeline: $2.5 billion, excluding Wincanton, a three-year high.
- Organic Revenue Growth Guidance: 3% to 6% for 2025.
- Adjusted EBITDA Guidance: $840 million to $860 million for 2025.
- Adjusted Diluted EPS Guidance: $2.40 to $2.60 for 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- GXO Logistics Inc (GXO, Financial) reported a strong revenue growth of 21% year-over-year, reaching $3 billion for the first quarter of 2025.
- The company secured a landmark deal with the UK National Health Services supply chain, valued at approximately $2.5 billion, marking its largest contract ever.
- GXO's sales pipeline reached a three-year high of $2.5 billion, excluding Wincanton, indicating strong future business prospects.
- The integration of Clipper Logistics has bolstered GXO's presence in the healthcare sector, leading to new contracts with Siemens Healthineers and others.
- GXO's focus on technology and automation is yielding results, with AI implementations driving productivity improvements and cost savings starting to materialize.
Negative Points
- GXO recorded a net loss of $95 million in the first quarter, primarily due to a one-time charge related to a regulatory matter and restructuring costs.
- The company faces macroeconomic volatility, including potential impacts from tariffs and fluctuating inventory levels, which could affect future performance.
- There is a pending regulatory review by the UK CMA regarding the Wincanton acquisition, which could require the sale of a small part of the business.
- GXO's direct operating expenses increased to 85.9% of revenue, partly due to the integration of Wincanton, which has a higher direct OpEx mix.
- The company is exposed to potential risks from elevated inventory levels in North America, particularly in technology and fashion sectors.
