Best Smidcap Ideas: Resilient Growth At A Discount

Research evidence excerpt

Best Smidcap Ideas: Resilient Growth At A Discount

TD Cowen GXO Logistics

Global Research June 18, 2026

AT A GLANCE

Our Investment Thesis Forthcoming Catalysts

We see GXO as a technology-focused industry leader in third-party logistics that appears Integration of Wincanton

well positioned to benefit from secular tailwinds including warehouse automation, global e-

commerce growth and adoption, and logistics outsourcing growth. GXO holds a resilient blue

Earnings

chip customer base with new customer wins having an average duration of ~5 years (with new

contracts trending ~7-10 years) with a retention rate in the mid-to-high 90s. We rate GXO Buy.

Base Case Assumptions Upside Scenario Downside Scenario

Consumer demand remains stable in Consumer demand continues to see growth, Consumer demand diminishes, causing

Europe and the U.S., allowing GXO's current allowing GXO to grow with its current GXO's customer base to pause growth

customer base to grow moderately, as GXO customer base while new automation initiatives, while GXO's new contract pipeline

continues to drive additional growth from and technology are deployed. GXO's new softens.

new customer wins. contract wins exceed anticipated pipeline.

Price Performance Company Description

GXO Logistics (GXO) is a pure-play contract logistics company that offers warehousing,

$70

distribution, fulfillment, e-commerce, reverse logistics, and other custom solutions. GXO

previously operated under XPO as its logistics arm, which was spun-off in August 2021.

Headquartered in Greenwich, CT, GXO primarily operates in Europe (with executive offices in

60 London). As of 2025 year-end, GXO operated 1,043 facilities primarily in the U.S. and UK. GXO

works predominantly with large corporations (Apple, Nike) and their warehousing facilities.