Q2 STOCKS TO BUY

XPO Fails to Capitalize on Earnings Beat, Guidance Boost

Option traders have rarely been more bearish in the past year

Digital Content Manager
May 4, 2021 at 10:27 AM
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The shares of XPO Logistics Inc (NYSE:XPO) are down 2.7% this morning, last seen trading at $137.42, struggling to capitalize on a first-quarter earnings and revenue beat. The trucking and logistics company also lifted its full-year guidance, citing strength in "e-commerce, outsourcing and warehouse automation," according to CEO Brad Jacobs.

The equity hit a fresh record high of $142.70 yesterday, before settling at $141 -- a region that reject XPO on Friday. Though this level may be an obstacle XPO needs to face if it wants to keep climbing, the security's charge up the charts since March 2020 has been nothing short of impressive. In the last 12 months, XPO Logistics stock has added over 115%, easily toppling brief resistance at the $100 mark, with long-term support from its 100-day moving average.

Analysts haven't chimed in on XPO Logistics' quarterly report just yet, but most members of the brokerage bunch are already bullish. Of the 18 in coverage, 15 called the stock a "buy" or better, while three said "hold." Plus, the 12-month consensus price target of $147.10 is a 7.3% premium to current levels.

Despite the recent record highs and impressive price action, the options pits aren't convinced, meaning an unwinding of pessimism could give XPO the boost it needs to surge higher. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), XPO sports a 50-day put/call volume ratio of 2.06, which stands higher than all but 2% of readings from the past year. 

Adding to this, the security's Schaeffer's put/call open interest ratio of 1.04 also sits higher than 98% of readings in its annual range. This mean short-term option traders have rarely been more put-biased in the past 12 months. 

 
 

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