Analyst Ken Hoexter of Bank of America Securities reiterated a Hold rating on RXO, Inc., retaining the price target of $16.00.
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Ken Hoexter has given his Hold rating due to a combination of factors, including challenges RXO, Inc. faces in maintaining its financial performance amidst difficult market conditions. Supply-side pressures, driven by regulations impacting commercial drivers and electronic logging devices, have created headwinds for the company. Additionally, despite recent improvements in spot rates and tender rejections, RXO believes that a sustained increase is needed to meaningfully enhance its spot load activity.
Hoexter also highlighted a contraction in brokerage gross margins and a slight decline in revenue growth projections for RXO’s Last Mile services. While the company’s efforts to improve efficiency and leverage innovations such as AI are acknowledged, Hoexter remains cautious on near-term margin pressures and operational challenges. While RXO appears to be moving beyond its lowest earnings point, the balanced outlook suggests limited upward potential, justifying the Hold recommendation.
Hoexter covers the Industrials sector, focusing on stocks such as CSX, CH Robinson, and Canadian National Railway. According to TipRanks, Hoexter has an average return of 2.3% and a 49.60% success rate on recommended stocks.
In another report released on December 15, Stifel Nicolaus also maintained a Hold rating on the stock with a $16.00 price target.