XPO (XPO) PT Lowered to $148 at Citi

Citi analyst Ariel Rosa lowered the price target on XPO (NYSE: XPO) to $148.00 (from $170.00) while maintaining a Buy rating.

The analyst comments "XPO reported daily tonnage down -8.1% y-y in Feb., improving from -8.5% in Jan., leaving an uphill climb to achieve its prior guidance for mid-single-digit 1Q25 decline (we were estimating -6%, which we now revise to -7.5%). As discussed in our mid-quarter update on LTL peers ODFL and SAIA, we have increasing concerns that economic instability and tariffs could pose near-term risk to LTL volumes. Nevertheless, CEO Mario Harik was upbeat in noting Feb. volume outperformed seasonality, with strong pricing supporting its margin outlook (XPO expects sequential OR improvement in 1Q25 relative to 4Q24’s 86.2% and 150bps of operating ratio improvement for the full-year from 2024’s 84.8%). XPO will need to rely on its various self-help initiatives to achieve this, which includes service improvement, price-taking, linehaul insourcing, new terminals ramp, premium offerings rollout, and better local business mix to help offset volume weakness."

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