GXO Logistics Inc (NYSE:GXO) (GXO) has built a strong track record over the past four years with revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA) compound annual growth rates of 10.3% and 13.9%, respectively, according to UBS analysts.
In a note to clients, they initiated coverage on shares of the second largest third-party warehouse logistics services provider with a ‘Buy’ rating and a 12-month target price of $74, citing expectations of multi-year revenue and EBITDA growth in the high single-digit range.
"Visibility to more growth is supported by GXO's skills in automation and reverse logistics and by a strong customer base with leverage to e-commerce and retail (~50% of revenue)," the analysts wrote.
They added that growth expectations for GXO's large customers (about 7% annually) are supportive of GXO's revenue growth, with visibility also illustrated by the nearly $457 million in new contract revenue already locked in for 2024, representing about 5% growth.
Shares of GXO Logistics edged 0.6% lower to $62.14 in midday trading on Tuesday but have gained 48% year to date.
Contact Sean at sean@proactiveinvestors.com