Texas Roadhouse earnings missed by $0.05, revenue topped estimates
Truist Securities maintained its buy rating and $18.00 price target on RXO, Inc. (NYSE:RXO) on Wednesday, highlighting significant upside potential for the freight brokerage company despite ongoing industry challenges. According to InvestingPro data, RXO’s stock has experienced significant volatility, with the price falling nearly 40% over the past six months, though analysts expect sales growth in the current year.
The firm sees "as much as 60%+ upside potential" for RXO stock based on a mid-cycle multiple of 10-11x EBITDA, with integration synergies from the Coyote acquisition progressing as planned and opportunities for margin and free cash flow expansion. The company currently trades at an EV/EBITDA multiple of 26.5x, with analyst price targets ranging from $10 to $23.
Truist described RXO as a "well-positioned, underappreciated story" that is effectively managing costs, productivity, and integration milestones during the current freight market downturn, creating the foundation for earnings and free cash flow leverage when the industry recovers.
The firm noted RXO is successfully building traction in key growth segments including less-than-truckload (LTL), Last Mile delivery services, and Managed Transportation offerings, while developing a fully integrated platform that should position the company advantageously when freight volumes improve.
While acknowledging that near-term freight market weakness persists and volume recovery remains "more macro driven," Truist identified RXO as "one of the most underappreciated freight recovery plays" in its coverage universe. With revenue growth of 32.4% in the last twelve months and analysts expecting profitability this year, RXO shows promising recovery potential.
In other recent news, RXO Inc . reported its Q1 2025 earnings, which fell short of expectations. The company posted an earnings per share (EPS) of -$0.03, missing the forecasted $0.18, with total revenue reaching $1.4 billion. Brokerage revenue made up a significant portion, totaling $1.1 billion. Despite these challenges, RXO anticipates improvements in Q2 with adjusted EBITDA guidance between $30 million and $40 million. Analyst firms have also provided updates on RXO’s stock. Citi increased RXO’s price target to $18 while maintaining a Neutral rating, reflecting discussions with RXO’s management about the company’s long-term prospects and recent Coyote acquisition integration. Truist Securities, on the other hand, cut the price target to $18 but maintained a Buy rating, citing confidence in RXO’s long-term earnings potential and successful execution of strategic initiatives. RXO’s leadership remains optimistic about future growth, emphasizing the potential for synergy realization and technological integration to enhance financial performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.