XPO stock rating reiterated at Outperform by BMO Capital

BMO Capital reiterated its Outperform rating and $140.00 price target on XPO (NYSE:XPO), currently trading at $120.66, following a series of investor meetings with the company’s CEO, Mario Harik. The stock has shown strong momentum, delivering an 18.7% return over the past year despite recent market volatility.

The research firm expressed confidence in XPO’s execution against strategic priorities despite challenging macroeconomic conditions, noting the company has shown strong performance since launching its transformation plan in late 2022. According to InvestingPro data, XPO maintains a "GOOD" overall financial health score, with particularly strong metrics in profit and price momentum.

BMO Capital analyst Fadi Chamoun stated: "Strong Execution Against Strategic Priorities to Continue Driving OR Improvement; We hosted Mario Harik, CEO, for a series of meetings with investors."

The analyst indicated reinforced conviction in both near-term outlook and medium-term trajectory for operating ratio, earnings, and free cash flow through 2028-2029, which BMO believes supports a valuation "in the $200 range."

XPO’s 12-month price target remains at $140.00, unchanged from BMO Capital’s previous valuation of the transportation and logistics company.

In other recent news, XPO Logistics has reported a decline in May’s less-than-truckload (LTL) freight metrics, with a 5.7% decrease in tonnage per day compared to the previous year. Despite this, the company continues to focus on cost and revenue initiatives aimed at growth. Analysts have weighed in on XPO’s performance and outlook, with Benchmark maintaining a Buy rating and a $130 price target, citing improvements in volume and operating ratio. Stifel also retains a Buy rating, though it has lowered its price target to $135, acknowledging XPO’s margin expansion amidst a challenging freight market. BMO Capital has reduced its price target to $145 but continues to rate the stock as Outperform, highlighting XPO’s progress in achieving its operating ratio targets ahead of schedule. Meanwhile, BofA Securities has adjusted its price target to $119 while maintaining a Buy rating, recognizing XPO’s efforts to enhance LTL yield and productivity. These developments reflect XPO’s strategic focus on improving operational efficiency and adapting to market conditions.

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