BofA Securities increased its price target on XPO (NYSE:XPO) to $209.00 from $160.00 while maintaining a Buy rating on the stock. At the time of the update XPO was trading at $185.62, having recovered substantially from its 52-week low of $85.06 and moving closer to its 52-week high of $200.13.
Shares of XPO jumped 5.5% on the day, significantly outperforming a 1.0% decline in the S&P 500 and a 1.5% drop among less-than-truckload (LTL) peers. BofA attributed the relative strength to XPO delivering above-seasonal results in January combined with evidence of continued operational improvements.
The company reported adjusted normalized fourth-quarter earnings of $0.80 per share, a 19% increase year over year. That result slightly exceeded BofA's own estimate of $0.79 and topped the Street consensus of $0.76 per share.
XPO has laid out a plan it says will deliver 100-150 basis points of LTL margin improvement in 2026 without requiring a meaningful macroeconomic recovery. In light of that outlook, BofA updated its internal forecast and now projects a 200 basis point improvement to 82.0%, up from its prior expectation of a 120 basis point gain to 82.8%.
The company carries a market capitalization of $21.79 billion and a reported beta of 1.79, indicating greater volatility versus the broader market. Management highlighted that the margin trajectory assumes flat tonnage per day in 2026, while acknowledging there would be upside if demand continues to beat seasonal patterns.
On a peer comparison, XPO narrowed its margin gap with Old Dominion Freight Line, reducing the differential to 7.7 percentage points in Q4 2025 from 8.4 percentage points in Q3 2025, reflecting progress in closing the performance gap with a best-in-class competitor.
In addition to the BofA action, several other analyst and strategic developments have been reported. Benchmark raised its price target for XPO to $165, retained a Buy rating and kept the company on its "Best Ideas" list while adjusting some forward earnings assumptions. Deutsche Bank labeled XPO a Catalyst Call Buy Idea, signaling potential upside even amid concerns about near-term earnings. By contrast, Evercore ISI lowered its rating to In Line, pointing to volume pressures despite highlighting a modest upside to fourth-quarter EPS. Wolfe Research cut its view to Peerperform, reflecting caution about the LTL sector outlook.
Separately, Brad Jacobs announced he will step down as chairman of XPO and GXO by the end of 2025. He will remain with XPO as a Senior Advisor through mid-2026. The combination of analyst actions and this leadership transition illustrates a mix of optimism on operational momentum and caution about volume and sector headwinds.
What this means
- XPO's upgrade from BofA reflects confidence in operational execution and the company's stated path to LTL margin gains in 2026.
- Market reaction showed the stock outperforming major benchmarks and peers, emphasizing investor focus on near-term results and margin trajectory.
- Analyst views remain mixed overall, with multiple firms revising targets and ratings in light of recent results and sector dynamics.