Investors in XPO, Inc. (NYSE:XPO) had a good week, as its shares rose 3.5% to close at US$190 following the release of its quarterly results. XPO reported US$2.4b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.53 beat expectations, being 3.3% higher than what the analysts expected. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, XPO’s 20 analysts are now forecasting revenues of US$9.64b in 2027. This would be a meaningful 9.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 44% to US$6.21. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$9.58b and earnings per share (EPS) of US$7.50 in 2027. So there’s definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
Check out our latest analysis for XPO
It might be a surprise to learn that the consensus price target was broadly unchanged at US$223, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values XPO at US$275 per share, while the most bearish prices it at US$115. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the XPO’s past performance and to peers in the same industry. It’s clear from the latest estimates that XPO’s rate of growth is expected to accelerate meaningfully, with the forecast 7.2% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 3.2% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 7.1% per year. XPO is expected to grow at about the same rate as its industry, so it’s not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$223, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have estimates – from multiple XPO analysts – going out to 2028, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for XPO that you need to take into consideration.
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