Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

XPO Logistics valuation compelling but macro headwinds dampen growth - Citi

Stock Markets Nov 30, 2022 15:58
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
XPO
-1.48%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Sam Boughedda

XPO Logistics (NYSE:XPO) was reinstated with a Neutral rating and a $42 per share price target at Citi on Wednesday.

Analysts told investors in a note that while the company's valuation "remains compelling," they believe macro headwinds will "likely dampen tonnage growth," even with easier comps than peers.

"Looking into 2023, we think freight weakness in 1Q could drive earnings misses broadly across our TL and LTL coverage, and we'd prefer to remain cautious ahead of that time frame. Following the spin of RXO, standalone XPO becomes somewhat of a 'show me' story in the LTL sector," wrote the analysts.

XPO Logistics shares are up around 1.86% at $38.37 per share so far on Wednesday, heading into the close. Although the stock has rallied around 28% in the last month, it is still down approximately 17% in 2022.

"We are updating our 4Q and 2023 EPS estimates to $0.85 and $3.15, respectively. Our adjustments reflect the stand alone XPO and account for roughly flat tonnage growth in 4Q and modestly negative growth for 2023. On the yield side, we believe LSD growth in 4Q is achievable. We expect ~60 bps of OR improvement for 2022, which is within the company's guided range," added the analysts.

"Given its position as a lower margin player compared to peers, it is likely that more evidence will be required to prove that XPO can bridge the margin gap before the company can narrow the multiple spread vs. higher margin peers."

XPO Logistics valuation compelling but macro headwinds dampen growth - Citi
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email