Stock of the day: WiseTech Global

(AI video summary)

This video was created on 26 May 2025 for IG audiences by ausbiz.

ASX code: WTC

Wisetech's strategic acquisition in the logistics sector

WiseTech Global has announced its acquisition of the United States (US) -listed SAS logistics company, e2open, for $3.25 billion. This acquisition, fully funded by debt, is expected to be earnings per share (EPS) accretive within the first year, despite the  approximately $40 million in transaction and integration costs.

This strategic move enhances Wisetech's presence in the US market and significantly expands its revenue base. By adding 500,000 connected enterprises, Wisetech strengthens its supply chain management capabilities and broadens its customer base, positioning itself for further growth in the logistics sector.

Financial implications and market reaction

WiseTech has reaffirmed its fiscal year (FY) 2025 guidance and plans to update its strategy and FY 2026 outlook in August.

Despite some market scepticism regarding the debt-funded nature of the acquisition, Wisetech's track record in integrating new businesses offers confidence. The market's reaction has been mixed, with some analysts expressing concerns over increased risk, while others view the acquisition as a positive step towards growth and diversification.

Challenges and opportunities in global trade

The acquisition is not only a strategic expansion but also a statement of Wisetech's resilience and adaptability in a complex market environment. By focusing on growth and profitability, Wisetech aims to shift market attention from recent corporate governance issues to its long-term strategic vision.

With a target price of $124, analysts remain cautiously optimistic about Wisetech's potential, although the stock's valuation reflects expectations for sustained long-term growth.