Susquehanna has downgraded XPO (NYSE:XPO) from Positive to Neutral and assigned a price objective of $210.00, which the firm says implies roughly 5% upside from current levels. The move accompanies higher earnings projections for the company, reflecting a nuanced view that improved fundamentals do not translate into substantial near-term share appreciation.
The research team increased its earnings-per-share forecast for 2026 by $0.35, taking the estimate to $4.55, and lifted the 2027 EPS projection by $0.70 to $6.00. Susquehanna attributes the upward revisions to stronger-than-expected tonnage that it anticipates will pick up into 2027, along with enhanced operating leverage driven by XPO's price-cost initiatives amid an upcycle.
Specifically, the firm highlighted expectations that XPO's less-than-truckload segment will generate incremental margins of 44% in 2027 - a metric the analyst says underpins much of the improved earnings trajectory. Despite that operational optimism, Susquehanna tempered its view on the stock's near-term return potential, prompting the shift to a Neutral rating.
At the same time, Susquehanna raised the target multiple it applies to XPO to 35x. The firm characterized that multiple as consistent with peak growth valuations seen at Old Dominion Freight Line during 2020-2021 and said it aligns with how the analyst presently values Old Dominion.
Data cited in the analysis show Old Dominion trades at a P/E ratio of 40.37 and carries a market capitalization of $40.67 billion. The company is noted to hold more cash than debt on its balance sheet and to have increased its dividend for nine consecutive years, though its current yield is 0.6%. An assessment based on Fair Value indicates Old Dominion appears overvalued, and supplemental research material is available for subscribers seeking more detail.
Recent company results for Old Dominion include fourth-quarter earnings per share of $1.09, beating several analysts' estimates, and revenue approximately 1% above consensus. The carrier reported an operating ratio of 76.7%, a figure the firm and analysts point to as evidence of disciplined cost management in a period of softer demand.
Analysts' responses to Old Dominion's results have been mixed. Baird moved Old Dominion from Neutral to Underperform while raising its price target to $204.00 from $166.00, citing concerns about volume. Truist Securities raised its price target to $225.00 and maintained a Buy rating, while initiating coverage for 2027 earnings estimates. Jefferies increased its price target to $195.00, noting early indications of a potential improvement in the freight cycle. BMO Capital kept an Outperform rating and emphasized that Old Dominion's fourth-quarter 2025 results exceeded expectations by 4%. Benchmark maintained a Hold rating after the earnings release.
Taken together, the analyst moves reflect a combination of guarded optimism about cost control and profitability on one hand, and caution about volume and broader demand dynamics on the other. For XPO, Susquehanna's revised earnings outlook and higher target multiple are balanced by a downgraded recommendation that signals limited upside from current prices. For Old Dominion, strong profitability metrics sit alongside valuation and volume concerns that have prompted divergent responses from the analyst community.