RXO, Inc. (RXO) PT Lowered to $26 at Stifel

Stifel analyst J. Bruce Chen lowered the price target on RXO, Inc. (NYSE: RXO) to $26.00 (from $28.00) while maintaining a Hold rating.

The analyst comments "RXO reported 3Q24 adjusted EBITDA of $33mm—toward the high end of the $28-$34mm guidance range, above the $31mm consensus, and slightly above our $32.3mm estimate. Adjusted EPS were in line. We think the positives were that: Coyote integration is moving ahead of schedule, total cost synergy estimates were increased from $25mm to $40mm, and as a function of the financing arrangement, leverage dropped 40%. However, we do have some concerns: namely, some business appears to have been pulled forward, which bolstered 3Q24 operating results, and that appears to be a drag on 4Q24. Management's guidance of $40- $45mm, which includes low-double-digit-millions of synergy capture, suggests degradation in y/y Coyote EBITDA and core RXO earnings, and much less Coyote earnings than originally anticipated, in our view. Integration is not an un-complicated process, and we feel opportunity has already been baked into valuation. Maintain Hold."

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