TD Cowen has maintained its Hold rating on RXO, Inc. (NYSE: RXO) and raised the price target to $28.00 from the previous $23.00. The adjustment follows RXO's reported earnings, which aligned with the second-quarter expectations, and the third-quarter EBITDA guidance that met consensus forecasts.
RXO experienced a downturn in truckload (TL) volumes, attributed to year-over-year comparisons, while simultaneously witnessing an uptick in yields.
However, the company is facing pressures on brokerage gross margins, which are expected to persist into the third quarter as bid rates increase.
The market is currently looking forward to further information regarding RXO's impending acquisition of Coyote.
The revised price target to $28 reflects the analyst's assessment of the company's recent performance and near-term expectations.
InvestingPro Insights
Following TD Cowen's report on RXO, Inc. (NYSE: RXO), real-time data from InvestingPro offers additional insights into the company's financial health and market performance. RXO's market cap stands at approximately $3.42 billion, indicating its significant presence in the industry. Despite the lack of profitability over the last twelve months, analysts are optimistic, predicting that net income is expected to grow this year, which may reassure investors looking for long-term growth potential.
InvestingPro data also shows a substantial price uptick with a 6-month total return of 40.29%, and an impressive 3-month total return of 42.21%, highlighting a strong short-term performance that could catch the eye of momentum investors. The company does not pay dividends, which may be a consideration for income-focused investors. Additionally, RXO is trading at a high Price / Book multiple of 5.97, as of the last twelve months ending Q2 2024, suggesting the stock may be valued more for its growth prospects than for its current book value.
For those considering RXO's investment potential, InvestingPro offers a suite of additional tips, including insights on the company's moderate level of debt and its trading multiples. Investors can explore more detailed analysis and metrics at InvestingPro, which lists 9 additional tips to help make an informed decision.
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