Citi Downgrades XPO to Neutral from Buy, Cites Valuation

Citi downgraded XPO, Inc (XPO) to Neutral from Buy with a price target of $140, citing valuation following the stock's recent rally. The analyst believes XPO's current valuation limits the potential for near-term upside.

Citi has downgraded XPO, Inc. (NYSE: XPO) from a Buy rating to Neutral, adjusting the price target to $140. This move reflects the analyst's view that XPO's current valuation could limit near-term upside potential, despite the company's strong operational performance [1].

The downgrade comes after XPO's stock experienced significant volatility, trading with a beta of 1.75. Citi's assessment is that while XPO has been executing well relative to peers, its elevated valuation could limit further upside without a meaningful acceleration in 2026 EPS estimates. The company's P/E ratio of 39.56 suggests a relatively high earnings multiple [1].

Citi acknowledged that XPO has made significant strides, including unlocking structural operating improvements that are expected to persist when macroeconomic conditions change. These improvements have driven XPO's strong outperformance in the transportation sector [1].

XPO is currently trading at a premium to peers like Old Dominion Freight (NASDAQ: ODFL) and Saia (NASDAQ: SAIA) among non-unionized top quartile less-than-truckload carriers. However, this premium valuation has led Citi to believe that the stock may be overvalued [1].

Recent analyst assessments have shown mixed sentiment towards XPO. Oppenheimer raised its price target to $150, maintaining an Outperform rating, while TD Cowen adjusted its price target to $133. BMO Capital, Benchmark, and Wells Fargo & Company also issued their own ratings and price targets, ranging from Overweight to Buy [1][2][3].

Despite the downgrade, XPO continues to implement cost and revenue initiatives to support growth. The company has cautioned that preliminary figures may not fully represent future performance, emphasizing the potential for variability due to economic and regulatory factors [1].

References:
[1] https://www.investing.com/news/analyst-ratings/citi-downgrades-xpo-stock-to-neutral-citing-valuation-concerns-93CH-4127794
[2] https://www.marketbeat.com/instant-alerts/xpo-nysexpo-stock-rating-lowered-by-citigroup-2025-07-09/
[3] https://www.marketbeat.com/instant-alerts/xpo-nysexpo-given-new-14400-price-target-at-wells-fargo-company-2025-07-07/