XPO Logistics (XPO) Peer Valuation Gap Could Close After Strong Q1 Results, PT Raised to $156 at BofA Securities

BofA Securities analyst Ariel Rosa raised the price target on XPO Logistics (NYSE: XPO) to $156.00 (from $138.00) after the company reported 1Q21 adj. EPS of $1.46, up 112% y-y and well above the Street’s $0.99 estimates. GAAP EPS of $1.02 includes $36 mil. in amortization of acquisition-related intangibles, $22 mil. in transaction, integration, and restructuring costs, and an $8 mil. debt extinguishment charge.

The analyst maintained a Buy rating, stating "Strong 1Q results could alleviate concerns about XPO’s consistency of execution, which we view as one of the biggest reasons for its valuation gap to peers. Contract wins in logistics, brokerage margins that are exceeding its largest competitor, and strong volume and pricing growth in LTL all support the case for further multiple expansion. Alternatively, 1Q was marked by severe anomalies in supply chains, and we look for XPO to affirm that typical seasonal trends will hold, with strengthening results through the year including sequential margin improvement and revenue growth through 4Q".

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