Jason Seidl, an analyst from TD Cowen, reiterated the Hold rating on RXO, Inc. (RXO – Research Report). The associated price target was lowered to $21.00.
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Jason Seidl has given his Hold rating due to a combination of factors influencing RXO, Inc.’s current financial performance and future outlook. The company’s adjusted EBITDA met expectations in the fourth quarter, but this was after significant adjustments, which raises questions about the underlying financial health. Additionally, the guidance for the first quarter indicates a decline in brokerage volumes, partially attributed to adverse weather conditions impacting the supply chain.
Furthermore, while RXO has emphasized cost synergies from its acquisition of Coyote, the tangible benefits of these initiatives are not clearly reflected in the financial model, leading to skepticism among investors. The decline in TL brokerage volumes despite a growing brokerage business is another area of concern. Although there is potential for volume growth as the market tightens, the current market conditions and signs of churn make it prudent to maintain a cautious stance, justifying the Hold rating.
In another report released on January 23, Stifel Nicolaus also maintained a Hold rating on the stock with a $27.00 price target.
Based on the recent corporate insider activity of 32 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of RXO in relation to earlier this year.