XPO (XPO.N): XPO 2Q26: Solid EPS beat with sub-80 OR and upbeat 2H guide, offset by macro uncertainty and valuation

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XPO (XPO.N): XPO 2Q26: Solid EPS beat with sub-80 OR and upbeat 2H guide, offset by macro uncertainty and valuation

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30 Jul 2026 21:00:08 ET │ 15 pages

XPO (XPO.N)

XPO 2Q26: Solid EPS beat with sub-80 OR and upbeat 2H guide,

offset by macro uncertainty and valuation

CITI'S TAKE

XPO reported 2Q26 adj. EPS of $1.70, up +62% y-y, above Citi/Street’s Neutral

$1.45/$1.48 estimates. Results included $9 million ($0.06/sh) benefit from

real estate gains on sale, without which, adj. EPS was $1.64, still solidly Price (30 Jul 26 16:00) US$199.26

above sell-side targets. Management struck an upbeat tone, noting record Target price US$221.00↓

service performance (claims ratio at 0.2%, nearly matching best-in-class

from US$226.00ODFL), with “capacity to take on substantially more volume in the recovery”.

It anticipates 3Q26 volume growth accelerating to mid-single-digits, Expected share price return 10.9%

following 8 consecutive quarters of tonnage growth near or below zero. Expected dividend yield 0.0%

Mgmt. believes it can achieve this growth with limited additional resources

Expected total return 10.9%and continued strong pricing growth as it gains share in premium end

markets, which in turn should drive operating leverage. The solid 2H Market Cap US$23,395M

commentary points to rising estimates, but similar to ODFL, investors

appear to be incorporating expectations of significant macro inflection,

which we believe merits a tempered approach given elevated valuation.

Price Performance

Fundamentals — Revenue was up +13% y-y, above our +9.5% estimate, beating our (RIC: XPO.N, BB: XPO US)

targets in both US LTL and Europe. XPO achieved a sub-80 adj. operating ratio for

the first time in company history in its LTL business, slightly beating our/Street

80.1%/80.2% estimates.