Citigroup maintains XPO at Buy, raises price target to $229 from $224

Top LTL carriers reported strong Q3 revenue growth, with XPO, Old Dominion, and Saia seeing increases of 17.4%, 13.1%, and 17% respectively. FedEx Freight had the slowest growth at 8.1%. Higher fuel costs contributed significantly to revenue increases. The U.S. Bank Freight Payment Index showed a 32.1% year-over-year spending increase, driven by tighter capacity and higher rates.

FedEx Freight shares rose 15% after its first standalone report beat earnings estimates and provided an upbeat outlook. Adjusted earnings were $1.49 per share, exceeding forecasts, with revenue up 12% to $2.46 billion. The company expects improved volumes and pricing, though rivals have seen higher base pricing increases. Analysts remain mixed, with some cutting price targets. The stock is down 16.5% over the past year.

XPO, Inc. reported Q3 revenue of $2.4B, up 12% YoY, with adjusted EBITDA rising 27% to $433M. LTL business saw record profitability, with revenue up 17% and adjusted operating income up 35%. Management expects strong Q4 performance and long-term growth driven by AI efficiencies and strategic initiatives, despite cost pressures.

XPO reported Q3 volume growth and pricing improvements, driven by service quality and higher-margin freight. The company expanded its fleet and network capacity, targeting local accounts and AI-driven operations. Costs increased due to inflation and higher fuel prices, but insourcing efforts reduced outsourced miles. XPO generated $291M in free cash flow, repurchased $150M in stock, and expects to double free cash flow by 2026.

XPO, Inc. reported Q3 2026 results with revenue up 12.4% YoY to $2.373B and EPS up 58.9% to $1.70, beating estimates. LTL segment revenue rose 17.4% to $1.473B, with record operating income. Free cash flow doubled to $291M, with full-year guidance raised to $800M. Management expects further margin expansion and cash flow growth.

Wells Fargo kept its Overweight rating on XPO but reduced its price target from $250 to $230, an 8% cut. The new target suggests a 25.7% upside from the Oct 29 close of $183.01. Recent analyst price targets for XPO range from $205 to $230.