Optimistic Outlook on XPO: Strong Performance Potential Driven by Pricing Strategy and Cost Management

Wells Fargo analyst Christian Wetherbee maintained a Buy rating on XPO (XPO – Research Report) yesterday and set a price target of $116.00.

Christian Wetherbee has given his Buy rating due to a combination of factors that highlight XPO’s potential for strong performance. The company is expected to surpass the typical seasonal operating ratio (OR) improvements in the second quarter, with projections indicating a year-over-year margin enhancement that sets it apart from its less-than-truckload (LTL) competitors. This is supported by XPO’s ongoing initiatives in pricing and cost management, which are anticipated to pave the way for achieving a low-70s OR in the long term.
Additionally, XPO’s pricing strategy remains robust, with the company consistently pricing above the market. This approach is expected to result in a sequential acceleration of revenue per shipment throughout 2025. Furthermore, despite concerns about overcapacity in the LTL industry, XPO perceives the situation as less severe than feared, which could lead to above-market growth as demand strengthens. These factors collectively contribute to Wetherbee’s optimistic outlook on XPO’s stock.

In another report released on June 10, Citi also maintained a Buy rating on the stock with a $137.00 price target.

Based on the recent corporate insider activity of 25 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of XPO in relation to earlier this year.