JPMorgan Upgrades RXO to Neutral Ahead of Acquisition Deal

JPMorgan Chase & Co. has upgraded its rating on RXO (NYSE: RXO) from “underweight” to “neutral,” according to a report issued on Tuesday. The firm also increased its price target for the stock from $22.00 to $30.00, suggesting a potential upside of 4.82% from its current price.

Several other analysts have recently weighed in on RXO. Stephens upgraded the stock to a “hold” rating in early July, while Weiss Ratings maintained a “sell (d-)” rating in September. Wells Fargo & Company reaffirmed a “positive” rating, and Citigroup kept its “neutral” rating. Benchmark also reiterated a “hold” rating in late July. Currently, five analysts rate RXO as a “Buy,” fourteen as a “Hold,” and one as a “Sell,” with an average consensus target price of $24.49.

RXO’s stock opened at $28.62 on Tuesday, with a 52-week range of $10.43 to $29.90. The company reported earnings per share of $0.06 for the last quarter, beating analyst estimates of $0.04. Revenue for the quarter was $1.77 billion, up 25% year-over-year. Institutional investors own 92.73% of the stock, with several large investors recently increasing their holdings.

In other news, RXO shareholders are set to receive $17.25 in cash plus 0.0856 shares of C.H. Robinson for each RXO share, representing an implied consideration of about $30.25 per share. The deal values RXO at a substantial premium to its pre-announcement trading level. Management expects approximately $300 million in annual synergies and anticipates the transaction to be accretive to earnings in less than one year.