Oppenheimer Reiterates Outperform on RXO After Coyote Logistics Acquisition

Oppenheimer analysts reiterated an Outperform rating on RXO (NYSE:RXO) with a price target of $31 on the stock. This comes after RXO's recent acquisition of Coyote Logistics, which positions the company as the third-largest truck broker in North America. The acquisition nearly doubles RXO's carrier base and broadens its customer portfolio by expanding into more small and medium-sized clients, as well as the Food & Beverage and Transportation sectors.

Additionally, the deal presents operational synergies, and RXO’s use of equity financing for the acquisition reduces its net debt to EBITDA ratio to below 2x.

Despite ongoing challenges in the transportation sector, the analysts believe RXO is effectively managing its expenses and expects adjusted EBITDA to recover after a Q2/24 trough.