Why did S&P Global maintain a negative outlook on RXO despite affirming its rating?

S&P Global is concerned that RXO lacks the ability to "increase its relative profitability or improve its credit measures to the levels we believe are necessary to stabilize the rating." The agency views higher spot market prices as beneficial but insufficient; it demands RXO demonstrate relative margin outperformance versus peers like Echo Global Logistics before removing the negative outlook.

How much has RXO's profitability declined since its 2022 spinoff?

Adjusted EBITDA fell to $177 million in 2025 from $366 million in 2022—a 52% decline. This erosion occurred despite significant revenue growth in the brokerage segment following the Coyote Logistics acquisition in late 2024, indicating persistent margin compression in RXO's core business.

Why does RXO's S&P rating differ from Moody's?

S&P rates RXO at BB with a negative outlook, while Moody's rates it Ba1. S&P's rating is two notches below the investment-grade cutoff, whereas Moody's is one notch below. The divergence reflects different assessments of RXO's ability to recover margins and operational performance relative to competitors.

What would trigger an upgrade from S&P Global?

S&P stated it requires RXO to demonstrate "greater and sustained relative strength in its earnings trajectory relative to its immediate peer group." If the company fails to show this differentiation, S&P would likely lower the rating by removing a positive comparable rating adjustment, potentially resulting in a downgrade.

How is the freight market recovery factoring into S&P's analysis?

S&P is "cautiously optimistic" that recent spot rate increases represent sustainable improvement as excess trucking capacity exits the industry. However, the agency explicitly stated "it is unclear if the recent rebound in trucking pricing is sustainable," requiring RXO to prove it can convert market strength into margin gains before outlook changes are warranted.

Risk & Disruption

Moderate

RXO Debt Rating Held by S&P; Negative Outlook Persists

Jun 13, 2026

Get tomorrow's supply chain signal

Daily supply-chain brief. Free, unsubscribe anytime.

The signal

S&P Global Ratings has affirmed RXO's BB debt rating while keeping the 3PL provider under negative outlook, signaling cautious skepticism about the sustainability of the recent freight market rebound. The affirmation maintains a notable divergence with Moody's, which rates RXO at Ba1—one notch higher than S&P's assessment. This dichotomy reflects broader uncertainty about whether current pricing improvements can offset structural profitability challenges that have plagued RXO since its 2022 spinoff from XPO. The core issue driving the negative outlook is RXO's deteriorating margin profile relative to peers.

Adjusted EBITDA has collapsed from $366 million in 2022 to $177 million in 2025, despite nearly doubling brokerage revenue following the late-2024 Coyote Logistics acquisition. S&P explicitly stated that RXO's performance "has prompted us to downwardly revise our assessment of its business risk profile," demoting the company's historical industry-leader status. The ratings agency is demanding evidence of "relative margin outperformance"—not just absolute improvement—before considering an upgrade, setting a high bar that extends beyond simple market recovery. While S&P acknowledges early signs of freight market stabilization and projects improved credit metrics over the next two years, the agency remains unconvinced these gains will address RXO's structural disadvantages.

The company must demonstrate its ability to differentiate from competitors like Echo Global Logistics and leverage its scale and proprietary data to achieve sustainable profitability. For supply chain professionals and RXO stakeholders, this signals that operational execution on the Coyote integration and margin expansion is now the critical variable—market tailwinds alone are insufficient to restore investor confidence.

Frequently Asked Questions

What This Means for Your Supply Chain

Simulation Suggestion

this month

What if spot freight rates decline 15% over the next six months?

Simulate the impact of a 15% decline in truckload spot rates over six months on RXO's earnings trajectory, EBITDA margins, and debt covenant compliance. Model the effect on RXO's ability to achieve the margin outperformance required by S&P Global to stabilize its rating.

Run this scenario

Simulation Suggestion

strategic

What if Coyote Logistics integration delays margin realization by 12 months?

Model the scenario where RXO's Coyote acquisition fails to deliver expected synergies and margin improvement is delayed by one year. Assess impact on S&P's outlook stability and the probability of a credit rating downgrade if relative margin targets are not met.

Run this scenario

Simulation Suggestion

this month

What if RXO achieves 200 basis points of margin expansion before end of 2025?

Simulate the impact of RXO achieving 200 basis points of margin expansion through operational improvements and Coyote synergies by Q4 2025. Model the effect on EBITDA, leverage ratios, and S&P Global's assessment of relative peer performance, including probability of outlook revision.

Run this scenario

Go deeper:

Supply Chain Digital Twin: The 2026 Guide

How operators model end-to-end supply chains to see how tariffs, supplier shocks, and regulatory changes ripple across cost, service, risk, and time.

Get the daily supply chain briefing

Top stories, Pulse score, and disruption alerts. No spam. Unsubscribe anytime.

The signal

Frequently Asked Questions

What This Means for Your Supply Chain

Related Articles