With new President Donald Trump focusing on tariffs as a means of controlling trade, investors can reasonably expect that the cost of importing some international goods could increase significantly once the new administration takes office in 2025. One possible outcome of this move could be an increase in the cost of importing some international goods. in domestic manufacturing and production. That’s not the case yet: In December 2024, S&P’s global U.S. manufacturing PMI, a measure of manufacturing growth or contraction, fell to 48.3 from 49.7 the previous month (a level of 50 or above indicates growth).
XPO today
(As of 12/20/2024 5:31 PM ET)
- 52 week range
- $80.26
▼
$161.00
- P/E ratio
- 43.77
- Target price
- $147.31
However, investors who are bullish on manufacturing in the United States may be attracted to companies associated with this industry. In addition to the firms that are themselves responsible for the production of various products, transport and logistics services are a key component of the industry. Freight carriers such as XPO Inc. New York Stock Exchange: XPO and Old Dominion Freight Line Inc. NASDAQ: ODFL provide freight collection (LTL) services domestically and internationally, making them an important part of the process of connecting manufacturers with end consumers. Among these firms, XPO stands out for its strong performance last year (XPO shares are up 57% for the year through December 20, 2024, while ODFL is down more than 9% over the same period).
Revenue growth, cost management, pricing potential
XPO’s customers include, but are not limited to, businesses in the industrial, manufacturing, retail, consumer products and logistics sectors. These businesses have a number of choices when choosing how to transport their products. ClearBridge Investments summarized some of the reasons why XPO outperforms its peers in a recent letter to investors, saying its “healthier industry structure and better pricing dynamics” deserve separate consideration from rivals such as United Parcel Service Inc. New York Stock Exchange: UPS.
XPO’s third-quarter earnings reflect that dominance. The company reported a 3.7% year-over-year increase in revenue, driven by both its North American and European businesses. XPO LTL’s North America operation particularly excelled in adjusted operating income, which increased 16.5% year-over-year. For this business line, the adjusted operating ratio was 84.2%.
However, the company saw not only revenue and profit growth, but also increases in revenue per delivery and operating leverage—indicators that XPO is operating efficiently and maximizing its growth potential.
XPO’s North American LTL business also increased third-quarter adjusted EBITDA to $284 million from $241 million a year earlier, reflecting higher ex-fuel margins and lower transportation costs.
Analyst Favorite
XPO Stock Forecast Today
$147.31
Growth potential 8.92%Moderate purchase
Based on ratings from 16 analysts
| High forecast | $179.00 |
|---|---|
| Average forecast | $147.31 |
| Low forecast | $80.00 |
XPO Stock Forecast Details
In addition to the stock’s strong performance throughout most of 2024, XPO has also attracted analyst attention and emerged as a favorite. Of the 16 analysts covering the company, 15 have rated it a Buy. In December alone, analysts at Goldman Sachs, Oppenheimer, JPMorgan and Stephens either confirmed or raised their price targets for XPO stock. The company’s consensus price target is now $147.31—based on share prices as of Dec. 20, shares would need to rise nearly 7% to meet that target.
Notably, the most recent price targets set by the four firms listed above are well above the consensus price target. Analysts at Goldman Sachs expect XPO shares to reach $167, for example, while analysts at Oppenheimer predict they could rise to $176.
Uncertainty at the end of the year?
Right at the end of 2024, XPO stock appears poised to give up some of the year’s gains, with shares down nearly 14% in the five days of trading leading up to Dec. 20. Much of this is likely due to rival FedEx. New York Stock Exchange: FDX In late December, it announced that the company would lower its fiscal year guidance amid ongoing challenges for the broader industrial sector.
FedEx also plans to spin off its freight business, which could ultimately be a positive for the specialty LTL industry that XPO is a part of, but will likely cause some volatility for carriers across the country in the short term. Investors considering investing in XPO in the new year would also be wise to keep a close eye on current developments with FedEx, as well as the company’s other competitors in the transportation industry.
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