Slow and Steady Could Win The 2027 Race

Research evidence excerpt

Not for redistribution without written consent of Morgan Stanley

M

Idea

August 5, 2026 03:49 PM GMT

Morgan Stanley & Co. LLC

GXO Logistics, Inc | North America

Ravi Shanker

Equity Analyst

Slow and Steady Could Win The

2027 Race

Nancy Hipp

Research Associate

Madison J Pasterchick

Research Associate

AlphaSignals Earnings Reaction

GXO Logistics, Inc (GXO.N, GXO UN)

Unchanged

Modest upside

Largely unchanged

Impact to our thesis

Financial results versus consensus

Direction of next 12-month

consensus EPS

Source: Company data, Morgan Stanley Research

GXO’s 2Q print and narrowed FY guide shows a steady 2026. It

is understandable that GXO’s more defensive model may not

have the cycle torque of rest of the space but the LT story

remains intact as mgmt. highlighted 2027 opportunities from a

record pipeline and margins.

Key Takeaways

Mgmt. remains highly confident in GXO’s long-term growth, supported by a

Freight Transportation | United States of America

Stock Rating

Industry View

Price target

Shr price, close (Aug 4, 2026)

Mkt cap, curr (mm)

52-Week Range

Fiscal Year Ending

12/25 12/26e 12/27e 12/28e

EPS ($)**

Prior EPS ($)**

P/E

EPS ($)§

Div yld (%)

2.51

20.9

2.47

0.0

Quarterly EPS ($)

Margin upside should come from Wincanton synergies, broader implementation

Quarter

2025

Q1

Q2

Q3

Q4

0.29

0.57

0.79

0.87

The modest 2Q beat and unchanged guidance reinforced concerns that the

investment thesis continues to be pushed out.

3.11

3.15

16.8

3.06

0.0

3.66

3.54

14.3

3.56

0.0

4.34

4.29

12.1

4.35

0.0

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

framework

** = Based on consensus methodology

§ = Consensus data is provided by Refinitiv Estimates

e = Morgan Stanley Research estimates

record pipeline, new verticals, geographic expansion, and technology adoption.

of the GXO Way, and a more attractive business mix.

Overweight

In-Line

$78.00

$52.37

$6,084

$66.67-45.42

2026e 2026e

Prior Current

0.92

1.12

0.50a

0.59a

0.88

1.15

2027e 2027e

Prior Current

e = Morgan Stanley Research estimates, a = Actual Company reported data

GXO has proven more defensive than peers through the downturn, but

meaningful earnings acceleration may lag more cyclical transportation names.

…