XPO’s Operational Alignment and Strategic Focus Justify Buy Rating with $130 Price Target

Analyst Christopher Kuhn of Benchmark Co. maintained a Buy rating on XPO (XPO – Research Report), retaining the price target of $130.00.

Christopher Kuhn has given his Buy rating due to a combination of factors that indicate XPO’s operational performance is aligning well with expectations. The company’s quarter-to-date Less-Than-Truckload (LTL) operating data for the second quarter show improvements in volume and operating ratio (OR) that are consistent with both the guidance provided and the analyst’s forecasts. Although the revenue per hundredweight excluding fuel appears slightly lower than the anticipated year-over-year growth, this is attributed to higher shipment weights, which in turn provide a positive impact on revenue per shipment.
Additionally, XPO’s tonnage figures for April and May, while showing a year-over-year decrease, are within the expected seasonal range and company guidance. The focus on price over volume has been a key element in driving OR improvement, which remains on track for a sequential improvement of 250-300 basis points. This strategic focus, along with stable demand and a strong local account business, supports the Buy rating, with a price target maintained at $130.

In another report released yesterday, Bank of America Securities also reiterated a Buy rating on the stock with a $139.00 price target.