Moody’s affirmed XPO’s debt rating with a positive outlook, hinting at a possible upgrade in the future. S&P downgraded XPO’s debt to BB earlier this year, but Moody’s positive outlook signals optimism for XPO’s profitability and credit metrics despite industry challenges.

The positive outlook from Moody’s comes after S&P’s downgrade, placing XPO at equivalent levels according to both agencies. Moody’s cited XPO’s operating changes and expectations of a slow recovery in freight markets for the positive shift in outlook, contrasting S&P’s pessimistic view based on a prolonged freight recession.

Moody’s expects XPO to improve profitability and maintain credit metrics despite industry challenges, with a predicted increase in operating performance by 2026. This positive outlook is driven by cost reduction initiatives and profitable growth from network expansion following the acquisition of Yellow Corporation terminals.

Despite industry challenges, Moody’s anticipates a slow recovery in freight volumes and spot pricing over the next year. The positive outlook for XPO reflects optimism for the company’s future performance and credit metrics, despite current market conditions.

Read more at Yahoo Finance: XPO’s outlook at Moody’s held steady but outlook is now “positive”