Stifel analyst J. Bruce Chan upgraded XPO, Inc. (NYSE:XPO) from Hold to Buy and increased the price target from $115 to $120.
The analyst says that he was too early in downgrading the stock earlier and now sees that the stock has over-corrected, especially led by internal productivity management efforts.
Earlier this month, the company reported strong first-quarter FY24 results, with revenue up 5.8% Y/Y and operating income more than doubled.
The analyst says the drivers were solid execution on its LTL 2.0 turn-around plan, highlighted by major improvements in service, pricing, cost efficiency, and network optimization over the past two years.
The analyst writes that XPO made all the right noises last quarter while other best-in-class peers missed results, and much of that has to do with the internal opportunities at the company.
Consequently, Chan raised EPS estimates to $3.55 (from $3.34) for FY24 and $4.80 (from $4.60) for FY25.
Investors can gain exposure to the stock via ProShares Trust ProShares Supply Chain Logistics ETF (NYSE:SUPL) and The Alger ETF Trust Alger Weatherbie Enduring Growth ETF (NYSE:AWEG).
Price Action: XPO shares are up 2.5% at $108.07 at the last check Friday.
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