XPO, Inc initiated with a Buy at Citi

Citi initiated coverage of XPO, Inc with a Buy rating and $127 price target The firm initiated coverage on 19 companies in the transportation and logistics industry. Citi’s “generally constructive view” is supported by its analysis that suggests the cyclical downturn in transports is in its late stages, with rates and margins near trough, offering the prospect of strong earnings growth in 2025 and into 2026 as rates recover. The positive stance is further supported by a view that many of the companies have strong management teams with track records of disciplined capital allocation, and that transportation companies “provide an irreplaceable, essential service to the North American economy, limiting disruption or replacement risk,” the analyst tells investors in a research note. The firm’s top picks are J.B. Hunt (JBHT), Saia (SAIA), CSX (CSX), and UPS (UPS). It tells investors to be positioned for a cyclical recovery and companies that are leveraged to realize outsized benefits as freight conditions tighten. Citi opened “positive catalyst watches” on CSX, Saia, XPO Logistics (XPO), and a “negative catalyst watch” on Werner Enterprises (WERN).