RXO vs. C.H. Robinson: the growing financial divide widens some more

Core Viewpoint - The financial gap between RXO and C.H. Robinson has widened, highlighted by S&P Global Ratings' recent actions regarding their credit ratings [1][2]. Credit Ratings - S&P Global raised C.H. Robinson's debt rating to BBB+ while placing RXO on a negative outlook, indicating potential for a downgrade in the coming months [1][2]. - RXO holds a BB credit rating, which is non-investment grade, while C.H. Robinson's BBB+ rating is above the investment grade threshold [2]. - Moody's has a more favorable view of RXO with a Baa3 rating, which is two notches above S&P's BB rating, while C.H. Robinson is rated Baa2 by Moody's, just one notch above RXO [3]. Stock Market Performance - C.H. Robinson's stock has increased by approximately 46.2% over the past 52 weeks, contrasting with RXO's stock, which has decreased by 49.5% during the same period [5]. - In the third quarter, C.H. Robinson reported diluted earnings per share of $1.34, whereas RXO was slightly unprofitable [5]. Future Outlook - S&P Global anticipates RXO's performance will be pressured by subdued freight demand through 2026, with earnings growth reliant on cost containment from the integration of Coyote Logistics [6]. - The ratio of funds from operations to debt for RXO is projected to be around 16% this year, with expectations to improve to just over 20% by 2026 due to lower restructuring costs and anticipated synergies [6][7].