GXO Logistics, Inc.
GXO Logistics, Inc. (NYSE: GXO) provides contract logistics services. It offers warehousing and distribution, order fulfilment, e-commerce, reverse logistics, and other supply chain services distinguished by its ability to deliver customized solutions at scale.
Key Highlights:
- The company reported a 28.17% increase in sales to USD 7.94 billion in FY21 (ended December 31, 2021) from USD 6.20 billion in FY20.
- GXO reported an increase in net income to USD 161 million in FY21 from a loss of USD 31 million in FY20.
- As of December 31, 2021, the company had cash and cash equivalents of USD 333 million with an outstanding debt (including financial lease obligations) of USD 961 million, indicating a leveraged balance sheet.
- The company operates at a longer cash conversion cycle of 34.3 days in FY21 compared to an industry median of 4.5 days.
- Stock is currently trading below its crucial short-term (50-day) SMA support levels, with an RSI level of 30.43, approaching the oversold zone.
- Stock is leaning towards the lower band of the 52-week range of USD 48.38 to USD 105.92.
- GXO's stock price has been relatively volatile throughout the year and has fallen 27.16% in the past three months.
Conclusion:
Considering the company's topline and bottom-line performance, leveraged balance sheet, macroeconomic headwinds, current trading levels, and bearish technical indicators, we recommend a "Watch" rating on the stock at the current price of USD 60.77, down 1.49% as of April 08, 2022, at 11:24 AM PDT.
One-Year Technical Price Chart (as of April 08, 2022, at 11:24 AM PDT). Source: REFINITIV, Analysis by Kalkine Group
Technical Analysis Summary:
*Current price as of April 08, 2022, at 11:24 AM PDT
Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.
Technical Indicators Defined: -
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.
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