Moody's Ratings upgraded XPO, Inc.'s corporate family rating by one notch to Ba1 from Ba2 on Monday, citing sustained margin expansion, improved credit metrics and stronger liquidity.
The rating agency also lifted the company's senior secured bank credit facility and senior secured notes to Baa3 from Ba1, and raised senior unsecured notes to Ba2 from Ba3. Moody's speculative grade liquidity rating was upgraded to SGL-1 from SGL-2.
The upgrades reflect XPO's execution of a multi-year operational improvement strategy, which has driven continuous yield improvements, higher network utilization at service centers acquired from Yellow Corporation, and cost efficiencies enabled by technology. The North American less-than-truckload segment led growth, supported by higher yields, a return to positive volume growth and labor productivity gains powered by artificial intelligence.
For the twelve months ended June 30, 2026, XPO's debt-to-adjusted EBITDA ratio declined to approximately 2.8x, with projections pointing to a further reduction to around 2.6x in 2026 and about 2.2x in 2027. Consolidated revenue grew roughly 10% in the first half of 2026 compared with the same period a year earlier, while EBITDA margins are projected to remain above 17%.
Liquidity remained robust as of June 30, with a fully available $600 million revolving credit facility, a $200 million letter of credit facility with $69 million available, and a cash balance of $298 million. The company also amortized $200 million in term loan principal during the year-to-date period.
Moody's noted that XPO is evaluating its European transport platform for a potential divestiture, which could further reduce diversification but accelerate deleveraging. The rating agency assigned a stable outlook, indicating limited near-term pressure for additional rating changes absent material shifts in the company's financial or operational trajectory.
XPO's shares were down 3.01% at $191.79 in late trading on Monday.
