XPO Logistics Files Form 10 for GXO Spinoff, Updates Guidance; Shares Drop

Shares of XPO Logistics Inc. (XPO) were down 1.6% on June 9 after the leading global provider of supply chain solutions filed Form 10, updated its full-year guidance and initiated 2022 guidance for GXO.

The Form 10 filing was related to the company’s planned spinoff of its logistics segment into a separate, publicly traded company (GXO). (See XPO stock analysis on TipRanks)

Looking ahead, XPO raised its second-quarter and full-year guidance on the back of stronger-than-expected performance in its transportation segment. The company forecasts full-year adjusted EBITDA in the range of $1.845 to $1.895 billion versus the prior guidance range of $1.825 – $1.875 billion. The Q2 EBITDA is expected to be greater than $490 million.

For GXO, the company forecasts adjusted EBITDA to grow between 14% and 20% year-over-year and to be in the range of $700 to $735 million. Organic revenue is expected to grow in the range of 8-12%.

XPO CEO Brad Jacobs said, “The separation will create two pure-play powerhouses in the supply chain industry, XPO in transportation and GXO in logistics, each with enhanced prospects for growth.”

The spin-off is expected in the third quarter of 2021, subject to certain regulatory approvals.

Following the company’s announcement, Oppenheimer analyst Scott Schneeberger maintained a Buy rating and the price target of $164 (14% upside potential) on the stock.

Overall, the stock has a Strong Buy consensus rating based on 14 Buys and 2 Holds. The XPO average analyst price target of $160.50 implies 11.54% upside potential from current levels. Shares of XPO have jumped 77.9% over the past year.

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