What Happened?
Shares of freight delivery company XPO (NYSE: XPO) jumped 3.5% in the afternoon session after JPMorgan reiterated its "Overweight" rating on the transportation and logistics company.
The firm's analyst affirmed the rating, suggesting continued confidence in XPO's business model and future growth. Adding to the positive sentiment, Moody's Ratings affirmed XPO's corporate family rating and changed its outlook from stable to positive, noting expectations of ongoing operational improvements through 2026. Furthermore, Benchmark maintained its "Buy" rating on the company, citing progress in improving pricing and margins, and added XPO to its Best Ideas List with a price target of $140.00.
After the initial pop the shares cooled down to $136.84, up 3.4% from previous close.
Is now the time to buy XPO? Access our full analysis report here.
What Is The Market Telling Us
XPO’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 27 days ago when the stock gained 4.3% on the news that the company provided a positive operational update at Morgan Stanley's 13th Annual Laguna Conference.
Management reported that tonnage declines had eased in August and reaffirmed its margin guidance for the third quarter. This update provided investors with insight into the company's performance amid ongoing softness in the freight industry, which has seen carriers' tons per day fall. While XPO has experienced a slip in weight per shipment, a sign of weakness in manufacturing, the news of easing tonnage declines offered comfort regarding its near-term resilience. The company also highlighted its ongoing commitment to capital returns, noting US$10 million in share repurchases last quarter. The combination of operational resilience and shareholder value focus appears to be resonating positively with investors despite persistent industry headwinds.
XPO is up 3.3% since the beginning of the year, but at $136.84 per share, it is still trading 13.5% below its 52-week high of $158.20 from December 2024. Investors who bought $1,000 worth of XPO’s shares 5 years ago would now be looking at an investment worth $1,427.
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