With incoming President Donald Trump focusing on tariffs as a way to control trade, investors may reasonably expect that the cost of importing some international goods could increase significantly after the arrival of the new administration in 2025. One possible outcome of this move could be an increase in domestic production and manufacturing. . This is not the case yet– For December 2024, the US S&P Global Manufacturing PMI, a measure of whether the manufacturing industry is growing or contracting, fell to 48.3 from 49.7 in the previous month (a level of 50 or higher indicates growth) .
xpo today
(As of 12/20/2024 at 05:31 PM ET)
- 52 week range
- $80.26
▼
$161.00
- P/E ratio
- 43.77
- Price target
- $147.31
However, investors who are bullish on U.S. manufacturing may be attracted to companies affiliated with this industry. Besides the companies responsible for manufacturing various products themselves, one of the main components of this industry is transportation and logistics services. Cargo transportation companies like XPO Inc. New York Stock Exchange: Expo and Old Dominion Freight Line Company. NASDAQ:ODFL Providing less-than-truckload (LTL) service domestically and internationally, making it an important part of the process of connecting manufacturers with end customers. Among these companies, XPO stands out for its strong performance last year (XPO shares are up 57% for the year as of December 20, 2024, while ODFL is down more than 9% over the same period).
Revenue growth, cost management, and pricing capabilities
XPO’s clients include companies in the industrial, manufacturing, retail, consumer goods and logistics spaces, among others. These companies have a range of options to choose from when deciding how to transport their products. ClearBridge Investments summarized some of the reasons why XPO has risen above its competitors in a recent investor letter, saying the company’s “healthier industry structure and better pricing dynamics” are worth considering separately from competitors like United Parcel Service Inc. New York Stock Exchange: UBS.
xpo Third quarter earnings Reflect this dominance. The company reported a 3.7% year-over-year revenue improvement, driven by its North American and European business. XPO’s North American LTL operation was a particular standout for adjusted operating income, which rose 16.5% year over year. This business line achieved an adjusted operating rate of 84.2%.
However, the company saw not only growth in net profits and revenues, but also higher rates of revenue per shipment and operating leverage – indicators that XPO is operating efficiently and maximizing its growth potential.
XPO’s North American LTL business also boosted third-quarter adjusted EBITDA to $284 million from $241 million a year earlier, as a result of higher revenue excluding fuel and lower purchasing transportation costs.
Favorite analyst
XPO stock forecast today
$147.31
8.92% upModerate purchase
Based on 16 analyst ratings
| High expectations | $179.00 |
|---|---|
| Average expectations | $147.31 |
| Low expectations | $80.00 |
XPO stock forecast details
In addition to its strong stock performance throughout most of 2024, XPO has also attracted analyst attention and become a favorite. Out of 16 analysts covering the company, 15 have given it a Buy rating. In December alone, analysts at Goldman Sachs, Oppenheimer, JPMorgan and Stevens reiterated or increased their price targets for XPO shares. The company’s consensus price target is now $147.31 — based on stock prices as of December 20, the stock would need to increase by roughly 7% to match that target.
It is worth noting that the latest target prices set by the four companies above are much higher than the agreed upon target. Goldman Sachs analysts expect XPO shares to reach $167, for example, while Oppenheimer analysts expect them to reach $176.
Uncertainty at the end of the year?
At the end of 2024, XPO shares look poised to give up some of the gains they’ve made over the year — in the five days of trading leading up to Dec. 20, the stock fell roughly 14%. Much of this is likely due to FedEx Corp New York Stock Exchange: FDX Its announcement in late December that it would lower its guidance for the fiscal year amid continuing challenges facing the broader industrial sector.
FedEx also plans to spin off Freight trucking business, a move that could ultimately be a positive for the niche LTL industry of which XPO is a part, but will likely cause some volatility for carriers nationwide in the short term. Investors considering investing in XPO in the new year would be wise to keep a close eye on ongoing developments with FedEx, as well as the company’s other competitors in the transportation industry.
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