Oppenheimer analyst Scott Schneeberger reiterated an Outperform rating on the shares of GXO Logistics, Inc. GXO, raising the price target from $62 to $67.
The analyst remains positive on the company's growth story, as secular warehouse supply chain outsourcing tailwinds will likely persist for an extended period across macro environments.
The analyst applauds GXO Logistics business pipeline, which was worth $2.3 billion as of 1Q23. The pipeline continues to be replenished at "an ample pace," the analyst notes.
Schneeberger sees at least 6% y/y 2023 organic revenue growth and infers assertive variable cost reductions, which could result in a better-than-previously-anticipated 2023 margin.
The analyst adds that GXO's margin should benefit from increasing automation/operating efficiency initiatives/Clipper acquisition integration synergies.
GXO is progressing ahead of schedule on its plan to deliver $60 million of operating efficiencies by 2027, mentions Schneeberger. This includes benefits from centralizing technology procurement, streamlining technology infrastructure, automating replicable processes, and streamlining nonoperational/non-customer-facing functions.
Price Action: GXO shares are trading higher by 0.27% to $60.52 on the last check Monday.
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