What Happened?
Shares of freight delivery company XPO (NYSE:XPO) jumped 4.3% in the morning session after an analyst at Stifel raised the company's price target to $145 from $135.
The analyst, J. Bruce Chan, maintained a 'Buy' rating on the stock, citing stable market trends and robust core pricing. While the note pointed out that demand remained unpredictable, the overall outlook was optimistic. The move was also supported by positive sentiment across the Less-Than-Truckload (LTL) sector, which refers to the transportation of relatively small freight. This sentiment was boosted after peer company Saia reported better-than-expected second-quarter results, suggesting healthier industry conditions than some investors had feared.
After the initial pop the shares cooled down to $136.80, up 0.9% from previous close.
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What Is The Market Telling Us
XPO’s shares are quite volatile and have had 17 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 biggest move we wrote about over the last year was 9 months ago when the stock gained 15.3% on the news that the company reported third-quarter earnings that exceeded analysts' revenue expectations. Gross margin improved significantly, making for a comfortable beat on EPS and EBITDA. Despite the solid results, management noted a "soft freight environment." Regardless, it was still a strong quarter for the company.
XPO is up 3.2% since the beginning of the year, but at $136.80 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 $1,642.
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