Raymond James reiterated its Market Perform rating on RXO, Inc. (NYSE:RXO), pointing to a mixed picture for the logistics firm following its 2024 purchase of Coyote Logistics. RXO shares were trading at $16.90 as the firm made the call, a price level that reflects a 33.7% gain year-to-date even as the company has not generated a profit over the last twelve months.
The analyst note stressed that RXO's historical advantages in shipment volume and gross margin have reversed since the Coyote acquisition, with recent performance metrics now trailing both peers and the broader market. InvestingPro data shows RXO's gross profit margin at 16.39%.
Raymond James also reported that three analysts have lowered their earnings estimates for the company, a sign of diminishing near-term revenue quality or rising cost pressure as measured by the sell-side revisions. The firm further highlighted the potential for near-term truckload supply tightening driven by regulatory actions, which it expects will compress brokerage margins toward near-record lows in upcoming quarters.
Despite these headwinds, Raymond James acknowledged that RXO is pursuing operational and contractual actions intended to position the business for a later rebound. The firm described management efforts to capture synergies and to honor contractual commitments, while noting these steps could exert additional pressure on margins in the short run.
On valuation, Raymond James maintained its Market Perform stance because RXO shares trade at what it describes as a roughly two-turn discount to the most comparable brokerage peer when measured against 2027 adjusted EBITDA estimates. The firm characterized this spread as producing a balanced risk/reward profile for investors.
RXO's most recent quarterly results underscore the mixed fundamentals the analyst firm highlighted. For the fourth quarter of 2025 the company reported an adjusted loss per share of $0.07, missing the consensus expected loss of $0.04 - a 75% negative surprise versus expectations. Revenue for the quarter came in at $1.5 billion, narrowly above estimates by roughly 0.67%, but the top-line beat did not offset investor concerns arising from the profit shortfall.
Analyst reactions to the earnings print were not detailed in the Raymond James note, and the financial community remains focused on any forward guidance management offers. The company’s results and the firm's commentary together illustrate the tension between revenue growth and profitability that RXO is managing in the current environment.
In sum, Raymond James sees both risks and potential upside - margin headwinds tied to market and regulatory conditions in the near term, and longer-term recovery prospects tied to synergy realization and contractual stability. For now, the firm views a Market Perform rating and the current valuation spread as reflective of a balanced outlook.