XPO intends to offer through one or more private placements $830 million in aggregate principal amount of senior secured notes due 2028 and $450 million in aggregate principal amount of senior unsecured notes due 2031. The Notes are being offered in addition to the previously announced proposed $700 million senior secured term loan facility. The company intends to use the net proceeds from the issuance of the Notes, together with the proceeds from the New Term Loan Facility and cash on hand, to repay term loan principal and accrued interest outstanding under its existing secured term loan facility and to pay fees, costs and expenses relating to the Notes and New Term Loan Facility. The remaining portion of the Existing Term Loan is expected to be repaid with cash on hand in the second quarter of 2023. The closing of the New Term Loan Facility and the terms thereof are subject to obtaining lender commitments, as well as market and other conditions, and there can be no assurance as to whether or when the New Term Loan Facility may be completed, or as to the actual size or terms thereof.
XPO intends to refinance a portion of its existing senior secured term loan facility due February 2025 with approximately $700 million of new senior secured term loans maturing in 2028. In connection with the Term Loan Refinancing, XPO anticipates refinancing additional amounts outstanding under its existing senior secured term loan facility and paying related fees, expenses and accrued interest with the proceeds of approximately $830 million of additional senior secured debt and approximately $450 million of additional senior unsecured debt, subject to market and other conditions. The remaining portion of XPO's existing term loans are expected to be repaid with cash on hand in the second quarter of 2023.
XPO announced that it has renewed its long-standing commitment as the official transportation partner of the Susan G. Komen 3-Day fundraising walks through 2025. To support the world's leading nonprofit breast cancer organization, XPO will provide trucks and drivers to all Susan G. Komen 3-Day fundraising walks for the next three years. In addition, the company will continue to provide storage for equipment, supplies and merchandise between events, and XPO trucks will display the iconic Susan G. Komen running pink ribbon.
Stifel downgraded XPO Logistics to Hold from Buy with a price target of $51, up from $48. The company's Q1 earnings topped expectations, but after a 50% run-up in the stock over the past few weeks, XPO has reached the firm's previous target and would require another rerating in a demand-uncertain environment, the analyst tells investors in a research note. Stifel adds that while the healthy secular industry growth tailwinds and self-help margin improvement warrant the stock run-up, the firm is "refocusing on other opportunities in the sector".
As previously reported, BofA analyst Ken Hoexter upgraded XPO Logistics (XPO) to Neutral from Underperform with a price target of $50, up from $33. Results in early February highlighted the core less-than-truckload struggles, but since then XPO has added Old Dominion's (ODFL) prior CFO Wes Frye, one of the less-than-truckload "legends" to its board on March 9 and named Dave Bates, Old Dominion's former SVP Operations, as its COO on April 20 in what BofA calls "a huge win for XPO." The firm notes that it has not seen any other Old Dominion management team member "cross the line to another carrier in 20+ years of covering the sector."
Credit Suisse analyst Ariel Rosa raised the firm's price target on XPO Logistics to $52 from $39 and keeps an Outperform rating on the shares. XPO posted a "solid" earnings beat" against a tough macroeconomic environment, with results in Europe better than feared, the analyst tells investors in a research note. The firm added that recent leadership changes give credibility to the company's LTL strategy and OR improvement.
BMO Capital analyst Fadi Chamoun raised the firm's price target on XPO Logistics to $55 from $48 and keeps an Outperform rating on the shares. The company's Q1 earnings beat demonstrated progress on all the strategic priorities, including improving service, reducing purchased transportation costs, higher labor productivity, and market share gains, the analyst tells investors in a research note.
TD Cowen raised the firm's price target on XPO Logistics to $51 from $45 and keeps an Outperform rating on the shares. The analyst said results came in above our forecast and expectations in Q1 as positive tonnage growth in the quarter and an above average April fares better than some LTL peers. Cost initiatives continue to work their way to the bottom line as OR makes steps in the right direction.
Barclays analyst Brandon Oglenski raised the firm's price target on XPO Logistics to $55 from $40 and keeps an Overweight rating on the shares. The company's Q1 came in better than feared, with less-than-truckload adjusted operating ratio improving sequentially despite a soft economic backdrop, the analyst tells investors in a research note. The firm says investors were likely relieved to see XPO's yield growth in line with guidance.