Stifel has increased its price target on XPO (NYSE:XPO) to $206.00 from $166.00 and reaffirmed a Buy rating following the company’s fourth-quarter results, the firm said on Friday. The stock was trading at $195.75, up sharply in the last week - a 25.33% gain - and sat roughly 0.95% below its 52-week high of $200.13. InvestingPro data cited in the report indicates that XPO appears overvalued relative to its Fair Value estimate.
The freight and logistics company reported adjusted diluted earnings per share of $0.88 for fourth-quarter 2025, topping the consensus estimate of $0.76 and Stifel’s own $0.77 projection. Those results included $0.08 per share attributable to real estate gains; Stifel noted that excluding those gains the adjusted EPS would have been $0.80.
XPO’s diluted EPS for the trailing twelve months is $2.64. Analysts covered in the brief are projecting $4.46 in diluted EPS for fiscal year 2026.
Within its Less-than-Truckload (LTL) business, XPO recorded an adjusted Operating Ratio of 84.4%, effectively in line with Stifel’s 84.3% estimate. Revenue for the LTL segment rose 80 basis points year-over-year, contrasting with Stifel’s prior expectation of a 50 basis point decline. Stifel attributed the outperformance in part to fuel surcharge revenue.
Stifel highlighted several operational moves the company has made, including a year-over-year reduction in outsourced LTL linehaul miles by 560 basis points. The research note stated that this pullback in outsourced mileage should position XPO to strengthen network responsiveness, capture operating leverage, enhance service quality and reduce purchased transportation costs if market conditions tighten.
The firm also pointed to XPO’s consistency in beating earnings expectations, noting 22 consecutive quarters of earnings beats tied to productivity improvements. Stifel framed this track record as supporting XPO’s potential to win market share over the long term in what the firm characterized as a healthy industry.
Other brokerages moved their targets and maintained favorable views after the quarter. Morgan Stanley raised its target to $95 from $90, citing fourth-quarter results that exceeded both Morgan Stanley’s and consensus EBIT estimates and noting a $13 million real estate gain included in the quarter. Jefferies lifted its price target to $215 from $180, leaving its Buy rating intact and expressing confidence in XPO’s outlook for 2026.
Wells Fargo increased its target to $205 from $147, describing the outlook as strong and observing that XPO’s first-quarter and full-year 2026 targets exceeded expectations. BMO Capital adjusted its target to $205 from $170 and said the move reflected confidence in the company’s margin improvement strategy. TD Cowen raised its target to $192 from $158, pointing to better-than-expected fourth-quarter performance and robust tonnage in January.
Taken together, these analyst actions signal a broadly positive reception across the sell-side to XPO’s most recent results and commentary. At the same time, the InvestingPro note that XPO may be trading above its Fair Value estimate highlights a valuation consideration that investors and market participants will likely weigh alongside the operational momentum.
Summary
Stifel boosted its price target for XPO to $206 and kept a Buy rating after the company posted an adjusted Q4 EPS beat that included real estate gains. The LTL segment delivered better-than-expected revenue trends and an adjusted Operating Ratio near Stifel’s forecast. Multiple other brokerages raised their targets, reflecting broadly constructive analyst sentiment even as some valuation metrics appear stretched.
Key points
- Stifel raises XPO price target to $206 from $166 and maintains a Buy rating following Q4 results.
- XPO reported adjusted Q4 diluted EPS of $0.88, above consensus and Stifel estimates; $0.08 of the EPS was from real estate gains.
- Several other brokerages - including Morgan Stanley, Jefferies, Wells Fargo, BMO Capital and TD Cowen - also increased price targets, signaling positive analyst sentiment; sectors affected include transportation, logistics and freight markets.
Risks and uncertainties
- Valuation risk - InvestingPro data suggests XPO may be trading above its Fair Value estimate, which could affect returns if market sentiment shifts; this is relevant to equity investors and analysts covering the transportation sector.
- Earnings composition - A portion of the quarter’s EPS beat was driven by real estate gains ($0.08 per share, and a separate $13 million real estate gain noted by Morgan Stanley), which may not reflect underlying operational profitability; this matters to investors assessing sustainable earnings power.
- Market-dependence of benefits - Stifel’s expected improvements from reduced outsourced LTL linehaul miles are conditional on market conditions; benefits to operating leverage and purchased transportation costs depend on how market tightening evolves, affecting logistics and freight cost dynamics.
Analyst and market signals
Analyst target revisions following the quarter were widespread: Morgan Stanley raised its target to $95 from $90 and flagged a $13 million real estate gain in the quarter; Jefferies set a $215 target (up from $180) and stayed constructive; Wells Fargo, BMO Capital and TD Cowen also raised targets, citing a stronger outlook, margin improvement prospects and solid tonnage trends. These moves collectively reflect heightened sell-side optimism about XPO’s 2026 prospects, while also underscoring that some of the upside in reported results included non-operational items.
Conclusion
XPO’s Q4 report prompted a flurry of upward target revisions and reiterated confidence among several brokerages in the company’s margin and productivity trajectory. Investors will weigh the operational beat and management actions against valuation signals and the limited contribution of real estate gains to the quarter’s results.