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GXO Logistics Breaks Out As Holiday Shopping Kicks Off

GXO Logistics

GXO Logistics

GXO


$2.10


2.44%


GXO Logistics Breaks Out As Holiday Shopping Kicks Off39%

IBD Stock Analysis

  • Clears 88.09 cup-with-handle IPO base, but off intraday highs
  • Relative strength line hits new high
  • Solidly profitable spinoff of XPO Logistics
GXO Logistics Breaks Out As Holiday Shopping Kicks Off

Composite Rating

GXO Logistics Breaks Out As Holiday Shopping Kicks Off

Industry Group Ranking

GXO Logistics Breaks Out As Holiday Shopping Kicks Off

Emerging Pattern

GXO Logistics Breaks Out As Holiday Shopping Kicks Off

Cup with Handle

* Not real-time data. All data shown was captured at
1:33PM EDT on
10/26/2021.

GXO Logistics (GXO) is the IBD Stock Of The Day, as the recent IPO’s warehouse and distribution services benefit from high demand as the busy holiday shopping season kicks off amid supply-chain bottlenecks. GXO stock broke out into buy range.




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The company uses machine learning, data science and predictive analytics to turn logistics into a competitive advantage for retailers, manufacturers and other supply-chain owners. GXO Logistics uses advanced automation and collaborative robots to boost productivity.

Headquartered in Greenwich, Conn., GXO’s services span 869 warehouses in North America and Europe. It is the No. 2 global contract logistics provider, with about 5% of the fast-growing $130 billion market in Europe and North America.

GXO Logistics is the former global logistics segment of XPO Logistics (XPO), which provides transportation and logistics to customers in North America, Europe and Asia. GXO was spun off on Aug. 2.

GXO Earnings Due

GXO reports third-quarter earnings Nov. 1 after the market close. FactSet analysts expect GXO earnings per share of 51 cents on sales of $1.9 billion. Both earnings and sales growth have been accelerating since the beginning of the year.

Jefferies analyst Hamzah Kazari said in a note to clients today that “there are several secular tail winds that can drive organic growth toward the higher end of 8% to 12%.” These include increased outsourcing in contract logistics, greater complexity of operations, customers adding e-commerce business (about 50% of revenue) and warehouse automation.

XPO earnings also are next week. Analysts expect XPO to earn 91 cents a share, 87% above the year-earlier period, on sales of $3.09 billion, a 27% decrease.

GXO Stock

Shares rose 2.2% to 88.15 on the stock market today, pulling back from a record 91.61 intraday along with the broader market. GXO stock raced past a cup-with-handle buy point of 88.09 and is still just in buy range, according to MarketSmith. The chase zone extends to 94.20.

The relative strength line is at a new high, reflecting GXO stock’s outperformance vs. the S&P 500 index. Its RS Rating is 89 out of a best-possible 99, while its EPS Rating is 66. With a Composite Rating of 85, GXO ranks No. 6 in IBD’s transportation logistics industry group. XPO ranks No. 3.

GXO stock’s performance comes amid strength in other transportation stocks. UPS (UPS) gapped up 7.2% to 218.64, just below a buy point, after beating Q3 earnings views and boosting its outlook for the rest of the year. UPS stock is right at record highs and above at least some entries.

Meanwhile, J.B. Hunt (JBHT) stock gapped up 8.7% on Oct. 15 after reporting a 59% jump in earnings and a 27% increase in revenue. JBHT stock rose 0.2% on Tuesday.

Old Dominion Freight Line (ODFL), which reports earnings Wednesday morning, is up 1%. ODFL stock has gained 7% since breaking out of a flat base on Oct. 18.

Former parent XPO dipped 0.3% to 86.03. XPO stock is working toward its own buy point and arguably is still buyable from retaking the 50-day line and breaking a trendline last week.

GXO Logistics Pushes Automation

GXO has been beefing up its workforce to meet increased demand for holiday deliveries.

On Oct. 13, it said it would hire more than 9,000 logistics employees across the U.S. and Canada ahead of the peak holiday season. Most of the hires will be in California, Georgia, Indiana, Pennsylvania and Texas. 

Globally, GXO Logistics is recruiting more than 20,000 employees, the company said in a statement.

However, key to GXO’s long-term strategy is automation. It’s responding to the e-commerce surge by increasing deployment of automation across its operations.

The company plans to deploy 3,100 robots in North America by the end of 2021 and open nine new automated sites in the U.S. and three in Europe.

GXO Partnerships

On Oct. 26, GXO announced a new e-fulfillment center in Middletown, Penn., to service luxury fashion retailer Saks. 

The center has begun shipping directly to customers nationwide as part of an innovative strategy to meet the surge in demand for luxury fashion heading into the holiday shopping season, the two companies said in a statement. The e-fulfillment center represents the first time the two companies have collaborated. 

“When we launched Saks as a stand-alone e-commerce company nearly seven months ago, we set ambitious growth targets for the business and have quickly exceeded our initial expectations,” said Na Li, senior vice president for logistics and shipping for Saks. “With GXO, we are in an even better position to meet the higher demand of our business while providing fast and flawless shipping to customers throughout the peak holiday season.” 

Earlier this month, GXO announced an agreement to open a new 715,000-square-foot distribution center in Goodyear, Ariz. The facility will serve as Abercrombie & Fitch’s new hub for its West Coast operations when it becomes fully operational in late 2021.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.

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