8 Most Undervalued Industrial Stocks to Buy According to Analysts

2) GXO Logistics, Inc. (NYSE:GXO)

Forward P/E as of October 8: 14.75x

Number of Hedge Fund Holders: 29

Average Upside Potential: 35.67%

GXO Logistics, Inc. (NYSE:GXO) is engaged in providing logistics services worldwide.

GXO Logistics, Inc. (NYSE:GXO) saw a significant influx of new business, securing ~$270 million in new contracts. Market players believe that expansion in Germany, which includes a substantial deal with Tchibo and a $1 billion contract with Levi’s, should help the company’s long-term growth momentum. GXO Logistics, Inc. (NYSE:GXO) reinforced its existing relationships with renowned clients like Boeing, Guess, Marks & Spencer, and Raytheon. Also, the acquisition of Wincanton should accelerate the company’s growth prospects in the aerospace, defense, and industrial sectors in the U.K. and Europe.

GXO Logistics, Inc. (NYSE:GXO)’s business pipeline boasts $2.3 billion in high-quality opportunities and it remains confident in delivering its 2027 revenue and adjusted EBITDA targets. While the company expects a stronger recovery in the UK and Europe, the improvement in the situation in North America in the latter half of the year should bolster its near-term growth outlook.

GXO Logistics, Inc. (NYSE:GXO) highlighted that new business activity remains robust, primarily in the humanoid space, which should drive future efficiency. Overall, the company is expected to see continued growth, courtesy of strategic acquisitions, an emphasis on technology and innovation, and a healthy pipeline of new business opportunities.

With its strong focus on optimizing operations via AI and a customer-centric approach, the company is well-placed to enhance its market position and deliver sustained shareholder returns. JPMorgan Chase & Co. upped its target price on the shares of GXO Logistics, Inc. (NYSE:GXO) from $61.00 to $63.00, giving an “Overweight” rating on 9^th July.

Mar Vista Investment Partners, LLC, an investment management company, released the first quarter 2024 investor letter. Here is what the fund said:

“GXO Logistics, Inc. (NYSE:GXO) experienced a setback this quarter. Customer volumes dropped 9%, stalling any organic growth. This slump was primarily driven by weakness in the omnichannel retail and consumer packaging sectors. As a result, the company’s 2024 forecasts fell short of analyst expectations, leading to a drop in share price after the announcement.

Despite cyclical headwinds, there are signs of a turnaround for GXO. Management indicated that customer volumes in January have already begun to improve. Additionally, they expect easier comparisons in the later half of 2024 to further aid recovery. To us, this suggests that the first half of 2024 may be the cyclical low point, with a rebound on the horizon. Over the next few quarters, GXO should get back on track towards achieving its long-term financial goals.”