MOODY’s has formed a logistical counterfeit in recent days, and the word was from the influential debt category positive each time.
In the last week’s announcement, Moody’s (NYSE: MCO) said it would increase its non -guaranteed classification on Gxo (NYSE: GXO) by one to the Baa3 of Ba1. But the importance is not only that GXO is the highest level. This is that the BAA3 is the first degree above the MOODY cut between the degree of investment and the non -investment debt, which means that in the eyes of Moody’s, GXO is no longer an unwanted balance.
The second step happened on Monday. It is not a change. However, the agency confirmed the CH Robinson (Nasdaq: Chrw) classification in Baa2, which are of the degree above the cutting line between investment and non -investing row debts. Moody’s cited the “disciplined approach to the giant 3PL company to manage its public budget and the leverage.”
The agency also said that it believes that “the strong market situation in the market in the US shipping mediation market will continue to push strong and consistent results despite a difficult operating environment, including flat sizes and weak pricing dynamics.”
The increase in the GXO classification of logistics is based on a level of BBB-THAT classification that the S & P Global Trans (NYSE: SPGI) has for several years.
However, the S & P Global Ratses looked at GXO to the negativity in March 2024 when the company acquired Wincanton last year, a logistics provider held in the United Kingdom in that country. The negative view, which is often a first step towards reducing the classification remains.
On the contrary, GXO’s new rating comes with a straight look. The expectations were positive, which are often an introduction to the company’s debt classification.
Gxo is a company circulating for the public, so its money is not secret. Classification procedures can be provided by agencies to companies owned by the private sector, but with debts circulating in effect on financial affairs that may not be available.
Gxo’s shares for the past year were weak, as it decreased about 3.9 %. But it was late late with a 3 -month increase of about 23.4 % and one month less than 18 %. It was one of the strongest logistical stocks in the second quarter.
The S&P step came to take a negative look at GXO when it announced not only the acquisition of Wincanton, but also a financing plan of approximately one billion dollars. But Moody’s view, more than a year, is more positive.
The agency said: “The significantly guaranteed classification reflects our expectations that the leverage of the GXO will remain modest after the successful acquisition of Wincanton PLC in 2024 and Clipper Logistics in 2022.” “We also expect the strong market mode that can be defended for the company in the logistical services sector will lead to the continued strength and flexibility in GXO operating results.”
The Gxo EBIT margin was only 1.8 %, according to Moody’s. (The EBIT account can vary between the classified company and the agency itself.) EBIT is the main number of classification agencies, as it provides a standard for profitability that can be used to finance debt payments, is expected to rise to 5 % over the next 18 to 24 months, Moody’s said, “” which improves credit standards despite the total economic uncertainty. “
Moody’s also said that she expects to follow GXO “a conservative financial policy, including focusing on the shareholders’ distributions and measurement. ” Gxo does not pay profits, but it does not buy its own shares. In the first quarter, the total re -purchases amounted to 2.8 million shares, compared to revenues of about 3 billion dollars. The company’s share price was traded on both sides of $ 40 per quarter.
“We expect to use the free cash flow for GXO to pay debts and the modest settings before considering any distributions of the shareholders,” Moody’s said.
But most of the MOODY report, which supports its increasing rating, focuses on GXO works. The higher classification “reflects its large scope and competition in the global logistical services market. The company benefits from the continuous growth of e -commerce and favorable trends in the use of logistical external sources by companies that will continue to support organic growth.”
In a statement issued to Freightwaves, the financial manager of GXO, Paris Orran, said that the promotion “is a recognition of the work our team has done to place GXO as a strong leader in the logistical services sector, ready to achieve future success. Our diversification – through geography and vertical offers – allows our specifications to provide very straightforward as we provide our customers with experiences that are not available to improve them.
The irony is that the upgrade comes a few months after reporting a net loss of $ 96 million, compared to a net loss of $ 37 million in the previous year. But profits before interest, taxes, depreciation and modified consumption were $ 163 million, an increase of 154 million dollars, and during the full year, the average Ebitda of $ 815 million was less than 824 million dollars registered in 2023.
Although the Wincaton deal was announced as closed last year, it took the matter until early this month to receive the final approval of the UK competition and market power for sale to move forward, with the condition that Wincaton make some grocery sector to get rid of the grocery sector.
Gxo Patrick Kelleher has been appointed as a new executive as part of this announcement.
Moody’s confirmation of BAA2 in Cho Robinson has its classification on 3PL, which has been present since at least 2018. The S & P Global Ratses has a BBB classification on Chr Robinson, but it reached this level by reducing May 2024.
Cho Robinson Management is promoted by the company’s adoption of the prosecution and other technology as one of the switching keys that appeared for the first time in the company’s profits in the first quarter of 2024, which sent the price of its shares.
MOODY referred to changes as a reason to confirm the classification of debt. The agency said: “CH Robinson adopted automation and AI, as it has completed more than 3 million shipping missions through obstetric artificial intelligence agents, and greatly improving speed and efficiency,” the agency said. “We expect the company to maintain margins, driven by the continuous productivity gains from its advanced use of automation and the IQ.
MOODY look at Ch Robinson held stable. However, this optimism is not derived from any belief that the conditions of the shipping market will enhance. Besides her praise for CH Robinson technology embracing, and a strong public budget, Moody also mentioned “strong liquidity” at Chobinson, which “will be preserved despite the difficult market conditions that are likely to continue until 2025”.
An email message to Ch Robinson has not been answered at the time of publication.
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