RXO Inc. downgraded to Underperform at Wolfe Research on earnings risk

Wolfe Research analyst Scott Group downgraded RXO Inc. to Underperform from Peer Perform with an $18 price target as part of a broader Transport Q2 preview. RXO’s stock is up 28% year-to-date, while calendar 2023-2024 consensus EPS estimates have declined 46% and 18% year-to-date, respectively, notes the analyst, who sees “significant EPS risk” for RXO in the second half. RXO is “one of very few companies with positive volumes right now,” but the firm is modeling a 60% year-over-year EBITDA decline and more than an 80% decline in EPS in Q2 as gross profit/load continues to decline, the analyst tells investors.