What Happened?

Shares of freight Delivery Company RXO (NYSE: RXO) fell 4.1% in the afternoon session after BofA Securities lowered its fourth-quarter 2025 adjusted EBITDA forecast for the company, citing near-term capacity tightening. 

The research firm reduced its target for a key profitability measure to $18 million from $25 million, putting it below RXO's own guidance of $20-$30 million. The cut was attributed to several supply-side issues, including government crackdowns on driver qualifications and electronic logging devices. 

Reinforcing the negative sentiment, S&P Global Ratings also revised RXO's outlook to negative from stable, pointing to weaker-than-expected credit metrics within a soft freight market. This followed the company's disappointing third-quarter 2025 earnings.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy RXO? Access our full analysis report here.

What Is The Market Telling Us

RXO’s shares are extremely volatile and have had 38 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 14 days ago when the stock gained 6.1% on the news that the company presented at the Goldman Sachs Industrials and Materials Conference, where its commentary was well-received by investors. 

Events like these provide a platform for a company's management to communicate its strategy and outlook. The positive stock movement suggested that the commentary from this conference, as well as a separate UBS conference, resonated positively with the market. The reaction indicated that investors were encouraged by the information shared by the company's leadership, boosting confidence in its future direction.

RXO is down 41.2% since the beginning of the year, and at $13.92 per share, it is trading 48.1% below its 52-week high of $26.81 from January 2025. Investors who bought $1,000 worth of RXO’s shares at the IPO in October 2022 would now be looking at an investment worth $663.

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