XPO’s Strong LTL 2.0 Strategy and Performance Drive Buy Rating Amidst Cautious Outlook

Jefferies analyst Stephanie Moore reiterated a Buy rating on XPO (XPO – Research Report) yesterday and set a price target of $135.00.

Stephanie Moore’s rating is based on XPO’s strong execution of its LTL 2.0 turnaround strategy, which has led to outperforming both its peers and seasonal expectations in terms of operating ratio (OR). Despite a cautious macroeconomic outlook, XPO is expected to improve its OR by 270 basis points sequentially in the second quarter, with a projected 100 basis points improvement in 2025, even if volumes remain subdued.
Furthermore, XPO’s first-quarter results exceeded expectations, with key metrics such as LTL adjusted OR improving and adjusted EBITDA and EPS beating estimates. The company’s pricing strategy, service improvements, and growth into higher-yielding local channels have contributed to a positive outlook. XPO’s ability to maintain strong performance amidst a soft industrial freight market and potential trade flow uncertainties further supports the Buy rating.

In another report released today, UBS also maintained a Buy rating on the stock with a $123.00 price target.

XPO’s price has also changed moderately for the past six months – from $133.990 to $106.120, which is a -20.80% drop .