Analyst Ken Hoexter of Bank of America Securities reiterated a Hold rating on RXO, Inc., reducing the price target to $16.00.
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Ken Hoexter’s rating is based on RXO, Inc.’s financial performance and market conditions. The company’s 3Q EBITDA is expected to outperform typical seasonality, driven by improved Truck Brokerage profitability and lower expenses, although there is a sequential decline in Last Mile. RXO’s focus on reducing its cost base and targeting stable gross margins suggests a balanced approach to managing financials.
However, despite these positive aspects, there are concerns about muted truck brokerage volumes and softness in the auto markets, which have impacted gross profit. The less-than-truckload volumes have increased significantly, contributing to a stable business segment, yet the overall market remains challenging. These mixed signals, along with the adjustment of the price objective to $16, support the decision to maintain a Hold rating.
According to TipRanks, Hoexter is a 3-star analyst with an average return of 1.5% and a 47.60% success rate. Hoexter covers the Industrials sector, focusing on stocks such as CSX, ArcBest, and XPO.
In another report released yesterday, Wells Fargo also maintained a Hold rating on the stock with a $15.00 price target.