Based on XPO Logistics, Inc.'s (NYSE:XPO) earnings update on 30 June 2019, analysts seem fairly confident, with earnings expected to grow by 21% in the upcoming year, though this is noticeably lower than the past 5-year average earnings growth of 65%. Presently, with latest-twelve-month earnings at US$390m, we should see this growing to US$472m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Check out our latest analysis for XPO Logistics
Can we expect XPO Logistics to keep growing?
The view from 17 analysts over the next three years is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of US$390m and the final forecast of US$819m by 2022, the annual rate of growth for XPO's earnings is 24%. EPS reaches $5.93 in the final year of forecast compared to the current $3.17 EPS today. In 2022, XPO's profit margin will have expanded from 2.3% to 4.2%.
Future outlook is only one aspect when you're building an investment case for a stock. For XPO Logistics, I've compiled three fundamental factors you should look at:
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