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BofA Lowers XPO Logistics Price Target In Wake Of 2019 Guidance Cut

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BofA Lowers XPO Logistics Price Target In Wake Of 2019 Guidance Cut

XPO Logistics Inc (NYSE: XPO) reported disappointing fourth-quarter results and lowered its 2019 guidance Thursday.

This may cause a “sentiment shift” that could persist for the next several quarters, according to Bank of America Merrill Lynch.

The Analyst

BofA's Ariel Rosa maintained a Buy rating on XPO Logistics and reduced the price target from $76 to $65.

The Thesis

XPO Logistics reported Q4 adjusted EPS of 72 cents, representing 61 percent year-on-year growth but missing the consensus expectation of 84 cents.

Adjusted EBITDA came in at $380 million, representing 13-percent growth but short of the estimate, Rosa said in a Friday note. 

The logistics company slashed its adjusted EBITDA growth projection for 2019 from 12-15 percent to 6-10 percent, citing economic headwinds in Europe as well as the loss of the postal injection business with its largest customer.

This customer, which is most likely Amazon.com, Inc. (NASDAQ: AMZN), is expected to significantly reduce its business with XPO Logistics starting in Q1, the analyst said. 

The is the second straight quarter in which the loss of a customer has meaningfully impacted the company’s results, Rosa said, adding that this “undermines the narrative” that having a diversified customer base makes XPO Logistics resilient to changes in a single account.

Price Action

XPO Logistics shares were plunging 17.55 percent at $49.10 at the time of publication Friday. 

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Photo courtesy of XPO Logistics. 

Latest Ratings for XPO

DateFirmActionFromTo
Feb 2019Credit SuisseMaintainsOutperformOutperform
Feb 2019SunTrust Robinson HumphreyMaintainsBuyBuy
Feb 2019Morgan StanleyDowngradesOverweightEqual-Weight

View More Analyst Ratings for XPO
View the Latest Analyst Ratings

Posted-In: Ariel RosaAnalyst Color Earnings News Guidance Price Target Reiteration Analyst Ratings Best of Benzinga

 

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