Analyst Ravi Shanker from Morgan Stanley maintained a Hold rating on RXO, Inc. and decreased the price target to $20.00 from $21.00.
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Ravi Shanker has given his Hold rating due to a combination of factors surrounding RXO, Inc.’s recent performance and future outlook. The company’s second-quarter results were largely in line with expectations, showing consistent EBITDA and operating income figures. While there were positive developments such as a significant year-over-year increase in LTL volumes and improvements in buy rates due to integration, these gains were not substantial enough to warrant a more optimistic rating.
Management expressed cautious optimism about the second half of the year, but the guidance suggests stability rather than significant growth, with EBITDA projections aligning with consensus estimates. The market is looking for more substantial improvements to drive the stock price higher, particularly aiming for earnings per share to exceed $1. Until RXO can demonstrate such growth, the stock is seen as fairly valued around its current price, justifying the Hold rating.
In another report released yesterday, TD Cowen also reiterated a Hold rating on the stock with a $16.00 price target.
RXO’s price has also changed moderately for the past six months – from $20.510 to $14.780, which is a -27.94% drop .