Stifel raises XPO stock rating to buy, sets $147 target

On Monday, Stifel analysts increased their outlook on XPO Logistics (NYSE:XPO) shares, upgrading the company’s stock rating from Hold to Buy and setting a new price target of $147.00. With a current market capitalization of $14.65 billion, XPO’s stock has experienced significant volatility recently, declining 14.46% in the past week. Stifel’s analysis highlighted XPO’s effective strategy and execution in integrating acquisitions, which has set it apart as one of the few successful transportation roll-ups.

The firm cited XPO’s disciplined approach to standardizing and implementing best practices across all business operations as a key factor in its success. This approach has been particularly effective following the company’s spin-off of its contract logistics and digital-enabled N.A. brokerage businesses into separate entities, GXO Logistics and RXO, respectively. The company’s operational efficiency is reflected in its $8.07 billion revenue and $1.22 billion EBITDA for the last twelve months.

Stifel pointed out that these strategic moves have led to an improved financial condition for XPO and a more focused operational strategy. With the supply-demand dynamics in the Less-Than-Truckload (LTL) sector being structurally favorable, and XPO’s LTL 2.0 strategy poised to enhance service and capacity, the company is expected to capture market share in the upcoming upcycle. According to InvestingPro, XPO trades at a low P/E relative to its near-term earnings growth, with a PEG ratio of 0.37, suggesting potential value despite its current overvaluation relative to Fair Value. Discover 10+ additional exclusive insights and detailed analysis in the Pro Research Report.

The analyst’s positive outlook reflects XPO’s potential for growth and value creation, as the company continues to refine its operational focus and capitalize on favorable market conditions. The new price target of $147.00 represents Stifel’s confidence in XPO’s trajectory and its ability to outperform in the logistics and transportation industry, with analyst targets ranging from $85 to $180 per share.

In other recent news, XPO Logistics, Inc. reported its fourth-quarter earnings for 2024, revealing an adjusted earnings per share (EPS) of $0.89, which significantly exceeded the forecast of $0.6556. The company also reported full-year revenue growth of 4% to $8.1 billion, although fourth-quarter revenue slightly missed expectations at $1.9 billion against a forecast of $1.93 billion. Despite this, XPO’s stock reacted positively, with a notable increase following the earnings announcement. The company’s adjusted EBITDA for the year rose by 27% to $1.3 billion, highlighting strong operational efficiency. Benchmark analysts recently raised XPO’s stock price target to $160, maintaining a Buy rating, citing expected long-term earnings growth driven by higher pricing and operational improvements. XPO’s strategic focus on premium services and cost management, including the integration of 25 new service centers, has contributed to its robust performance. The company anticipates further improvements in its operating ratio, projecting a 150 basis point enhancement in 2025. These developments underscore XPO’s ongoing efforts to enhance its service offerings and operational efficiency.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.