Citi’s logistics equity team paid a visit to XPO’s headquarters on November 11 and stated that shares could jump as high as $200 through 2022, according to Business Insider.
In February, Amazon cut its business with XPO by two-thirds. Amazon was rumored to be XPO’s largest customer and the reduction in business eliminated an estimated $600 million from XPO’s 2019 revenues.
“Management believes (middle single-digit) revenue growth and margin expansion is the base case in a stable macro environment,” they added. ” In addition, XPO has a 2022 target to increase profit by $700 million to $1 billion. Taken together, we believe there is a path toward $3 billion in annual EBITDA, which has the potential to drive XPO shares toward $200 over the next two-plus years,” wrote Citi’s logistics equity team.
XPO recently ranked at the top of the list for the country’s largest logistics players according to Transport Topics. The company reported $17 billion in revenue last year and employs 100,000 people in over 32 countries.
Their goal is comprised of four key initiatives. The first is XPO Smart, allowing managers to monitor labor productivity. The second is XPO Edge, which monitors XPO’s less-than-truckload network. The third is Automation, which encourages automated picking and packing to increase warehouse productivity. The fourth is XPO Connect, which is a digital freight brokerage.
Citi’s logistics equity team recently visited XPO’s headquarters and projected that the share price could reach $200 by 2022.
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