• In September 2025, XPO reported August operating data showing that tonnage declines were easing and reaffirmed its third-quarter margin guidance, demonstrating continued operational resilience despite softer freight demand.

• This update provided investors with greater visibility into XPO’s ability to manage through industry cycles, highlighting the effectiveness of its cost controls and technology investments during a challenging market period.

• We’ll examine how XPO’s reaffirmed margin guidance amid stabilizing freight volumes could influence the company’s long-term investment narrative.

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To be a long-term XPO shareholder, you have to believe the company can manage through freight market cycles, leveraging technology and cost controls to protect its margins even in muted demand periods. While the September operating update confirmed stabilizing freight volumes and reaffirmed margin guidance, it did not fundamentally shift the immediate risk: XPO’s reliance on less-than-truckload freight means persistent softness in industrial demand or aggressive competitors could erode revenue and weigh on near-term margins.

The company’s announcement on expanding its share buyback program in March, repurchasing US$10 million in shares in the last quarter, serves as a signal of management’s confidence in XPO’s capital returns, even as industry demand remains under pressure. This initiative, alongside operational efficiencies, supports the current investment thesis and may partly offset short-term profit headwinds that may arise from cyclical end-markets.

However, despite the stabilization in volumes, investors should be especially mindful of XPO’s continuing exposure to cyclical freight end-markets if economic conditions soften further…

Read the full narrative on XPO (it’s free!)

XPO’s narrative projects $9.2 billion revenue and $661.0 million earnings by 2028. This requires 4.7% yearly revenue growth and a $316 million earnings increase from $345.0 million today.

Uncover how XPO’s forecasts yield a $138.38 fair value, a 6% upside to its current price.

Three fair value estimates from the Simply Wall St Community range from US$91.89 to US$138.38, reflecting a wide spread in outlooks. While opinions differ, it is important to consider that XPO’s ongoing technology investments aim to drive margin improvements, which could play a key role in shaping future performance.