GXO Logistics, Inc. (NYSE:GXO) Just Released Its Annual Results And Analysts Are Updating Their Estimates

GXO Logistics, Inc. (NYSE:GXO) shareholders are probably feeling a little disappointed, since its shares fell 2.3% to US$54.49 in the week after its latest full-year results. GXO Logistics reported US$9.8b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.92 beat expectations, being 4.2% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on GXO Logistics after the latest results.

See our latest analysis for GXO Logistics

Following the latest results, GXO Logistics' twelve analysts are now forecasting revenues of US$10.2b in 2024. This would be a satisfactory 3.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to climb 12% to US$2.16. In the lead-up to this report, the analysts had been modelling revenues of US$10.3b and earnings per share (EPS) of US$2.25 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$68.56, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values GXO Logistics at US$80.00 per share, while the most bearish prices it at US$53.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that GXO Logistics' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.9% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this to the 28 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.2% per year. So it's pretty clear that, while GXO Logistics' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for GXO Logistics. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$68.56, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple GXO Logistics analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for GXO Logistics that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.