RXO, Inc. Hold Rating: Balancing Progress with Market Challenges and Freight Recession Concerns

In a report released yesterday, Ken Hoexter from Bank of America Securities reiterated a Hold rating on RXO, Inc. (RXO – Research Report), with a price target of $15.00.

Ken Hoexter has given his Hold rating due to a combination of factors including RXO, Inc.’s current financial performance and market conditions. The company has shown some positive signs, such as a sequential improvement in EBITDA targets driven by the Coyote acquisition and an increase in annualized cost synergies. However, RXO’s revenues fell short of expectations despite a significant year-over-year increase, and there are concerns about muted volumes and macroeconomic uncertainties affecting future performance.
Additionally, while the company has managed to achieve better-than-expected gross margins, there are persistent margin headwinds that could impact near-term profitability. The decision to lower the price objective to $15 reflects a more cautious outlook given the extended freight recession concerns and the company’s current valuation. Overall, while RXO is making progress in certain areas, the balance of risks and opportunities justifies a Hold rating at this time.

In another report released yesterday, TD Cowen also reiterated a Hold rating on the stock with a $15.00 price target.

RXO’s price has also changed dramatically for the past six months – from $28.710 to $12.990, which is a -54.75% drop .