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What Are Analysts Saying About The Future Of XPO Logistics, Inc.'s (NYSE:XPO)?

Simply Wall St

Based on XPO Logistics, Inc.'s (NYSE:XPO) earnings update on 30 June 2019, analysts seem fairly confident, with earnings expected to grow by 21% in the upcoming year, though this is noticeably lower than the past 5-year average earnings growth of 65%. Presently, with latest-twelve-month earnings at US$390m, we should see this growing to US$472m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

Check out our latest analysis for XPO Logistics

Can we expect XPO Logistics to keep growing?

The view from 17 analysts over the next three years is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

NYSE:XPO Past and Future Earnings, August 21st 2019

From the current net income level of US$390m and the final forecast of US$819m by 2022, the annual rate of growth for XPO’s earnings is 24%. EPS reaches $5.93 in the final year of forecast compared to the current $3.17 EPS today. In 2022, XPO's profit margin will have expanded from 2.3% to 4.2%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For XPO Logistics, I've compiled three fundamental factors you should look at:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is XPO Logistics worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether XPO Logistics is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of XPO Logistics? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.