XPO Buying $50 Million of Its Own Stock: Here's Why

Key Points

• XPO stock has a new reason to see higher prices on trade tariff bottlenecks, a view that has been taken on by insiders buying their own stock.
• According to Wall Street analysts, double-digit upside is the consensus view for XPO stock moving forward.
• The market s still willing to pay a premium valuation for XPO due to these outlooks, which are now justified.

There is one nuance attached to how investors look at inside buying and selling in the stock market, as this gauge is typically limited to institutions and other big household investment names. However helpful keeping track of this may be, there is a deeper layer that investors can look into to understand what’s going on behind an individual company and its future valuation.

This gauge has to do with insider buying, which institutions, big-known investment houses, or wealthy individuals do not do. This one comes in the form of corporations buying back their stock, which carries a net benefit over the other common method used to reward shareholders: paying out dividends. Contrary to dividends, stock buybacks keep working capital within the company in question, as well as eliminate the additional layer of taxes that dividends carry.

Understanding the importance of these buyback announcements, investors can justifiably become curious as to why insiders at XPO Inc. NYSE: XPO have recently announced a new stock buyback program. This new move by insiders, who arguably know the value of the company more than anyone else (including Wall Street analysts), could point to the belief that the stock might be cheap today or at least that it is expected to go higher in the coming months and quarters.

Management Isn’t Alone in Buying

Over the past quarter, up to $1.9 billion worth of institutional buying took place for XPO stock, meaning that management isn’t alone in taking on a more optimistic view for the company moving forward. More than that, another $22 million of institutional buying also came in for the new quarter, which so far is only made up of April 2025.

The latest buyback announcement allowed the company to buy up to $50 million worth of XPO stock, allowing for further value compounding and other benefits for shareholders, including an implied bigger ownership rate without having to buy another share.

Seeing that the stock has now traded down to only 60% of its 52-week high, as a result of a broader S&P 500 selloff during President Trump's recently announced trade tariffs, this discount now becomes an asymmetrical opportunity for those looking to buy ahead of a potential rally.

But there’s, of course, a reason for this additional buying, one that goes beyond just a deep discount from the yearly highs in the stock.

Tariffs Could Really Help XPO Move Higher

Suppose the goal behind trade tariffs is successful, which would result in the domestication of the national supply and logistics chain to satisfy the ongoing demand for products and raw materials. In that case, investors will have a clear opportunity to profit from XPO stock down the line.

The company’s management shares this view, and the broader Street analysts hold it today. The consensus price target is now kept at $139.9 per share, calling for up to 43.7% upside from where XPO trades today; however, some outliers called sentiment for an even higher ceiling ahead.

Particularly those from Stifel Nicolaus, who decided to reiterate their Buy rating on XPO stock as of April 2025 and keep their fair value at $142 per share on the company. This one would call for a bit of additional upside at up to 46% from today’s low price, giving investors another bullish pillar to lean on when developing their buy thesis.

This sentiment has also spilled over to the rest of the market’s mechanism, which is subtly hidden inside XPO’s valuation multiples today. Because it trades at a price-to-earnings (P/E) ratio of 33.1x today, it commands a steep premium to the rest of the transportation sector and its average 12.9x P/E valuation.

Some value investors would call this multiple expensive and directly assume that XPO has more potential downside than upside. Seasoned market operators would remind them that the market will always be willing to pay a premium for stocks it expects can outperform the peer group and the entire market.

This way, investors can now justify management's buying plans for the company, especially as the effects of trade tariffs might call upon the United States supply and logistics chain to be as robust as ever. That is where XPO earnings could be set to shine along with its price action.