A key shipping company just received two upgrades on new management additions that could underpin a strong rally. Citi upgraded shares of XPO from neutral to buy on Thursday, while JPMorgan Chase went from neutral to overweight on Friday. Citi’s new $50 price target represents about 22% upside for investors compared to the stock’s Thursday closing price of $40.79. JP Morgan is slightly more bullish with a $52 per share price target that represents 27% upside. The company focuses on less-than-truckload freight transportation. Shares of XPO were higher in pre-market trading, with a gain of 1.8% on Friday. Shares have gained roughly 22% from the start of the year. XPO YTD mountain Shares of transportation company XPO are heading higher Friday after two key upgrades from Citigroup and JP Morgan. Both firms cited additions to the company’s management structure as a key factor behind the bullish upgrades. XPO recently added new chief operating officer David Bates from Old Dominion, and he will assume the role on Friday. Former Old Dominion chief financial officer Wes Frye joined XPO’s board of directors on March 9. “In addition, we think two senior executives joining from OD can lead to further hires to broaden out the operating/sales ranks,” Citigroup stock analyst Christian Wetherbee wrote Thursday. “With this key addition, we are growing more confident XPO can close its OR and pricing gap vs. peers Old Dominion and Saia.” JP Morgan’s Brian Ossenbeck is similarly encouraged by the additions to XPO’s management structure, although the firm previously downgraded the stocks on worry over downward earnings revisions. “Our estimates remain unchanged but we are upgrading to Overweight with a higher, yet still discounted, multiple compared to peers as we believe this strategic hire should help unlock the potential at XPO which is still not completely reflected in the stock,” Ossenbeck said. — CNBC’s Michael Bloom contributed to this report.
