Wells Fargo’s Best Growth Stocks: 28 Stocks With The Highest Consensus EPS Growth Estimates

20. GXO Logistics Inc (NYSE:GXO)

Consensus Long-Term EPS Growth Estimate: 13%

Number of Hedge Fund Holders: 29

GXO Logistics Inc (NYSE:GXO) is a Connecticut-based logistics company that provides supply chain services such as fulfillment and warehousing for well-known brands such as Levi’s and L’Oreal. As a result, its sales and stock are dependent on economic health. As of H1 2024, 41% of the firm’s revenue came from the United Kingdom, with omnichannel retail accounting for 43% of the overall sales. GXO Logistics Inc (NYSE:GXO)’s geographical dependence on the UK and Europe for 66% of its revenue has also meant that its shares have struggled this year. Unlike the American economy which has continued to grow, Europe, in the wake of the Russian invasion of Ukraine and high rates, has failed to keep up. As a result, from the start of the year to early October, GXO Logistics Inc (NYSE:GXO)’s shares had lost 15% on the market. However, a Reuters report of a potential sale lifted the stock by 14%, and future movements should depend on the deal as well as European economic recovery.

GXO Logistics Inc (NYSE:GXO)’s management believes that Q4 will be a ‘peak season’ for the firm. Here’s what they shared during the Q3 2024 earnings call:

“As of the end of third quarter, we’ve won about $750 million of new business year-to-date. We’ve got several major projects that we expect to sign in the fourth quarter. 2024 has the making of being a record setting year for new business wins for GXO. Looking ahead to the fourth quarter, we’re ready for the peak season. We’ve mentioned that we saw the bottom of the inventory cycle in the fourth quarter of last year. As we head into this year’s peak, we’re seeing inventory levels returning to normal and demand for ecommerce capacity is accelerating. Our customer service satisfaction scores are at an all-time high, and our dependability has recently been recognized by Newsweek, which ranked us the top logistics provider among America’s Most Reliable Companies.

As commercial activity picks up momentum, our technology differentiation through the deployment of automation and AI is creating a multiplier effect in the efficiencies we deliver for our customers. On the back of our real world results, we are proud to have been recognized with a Supply Chain Excellence Awards for our leadership in warehouse AI by Logistics Manager a few weeks ago. Our technology differentiation is also helping us win new business. Our ongoing strong sales performance, coupled with our targeted M&A in key geographies and hard-to-penetrate verticals, is driving our long-term growth. In Germany, we jump started the growth of our business on the back of our acquisition of Clipper in 2022. Our state-of-the-art site in Dormagen is at full capacity.”