A decline in freight company XPO Logistics' stock is a buying opportunity, according to Morgan Stanley. The bank upgraded the stock to overweight from equal weight, keeping its $75 price target, in a Friday note calling XPO "too cheap to ignore" from analysts led by Ravi Shanker. Year to date, XPO has declined 37%, but is set up for more than 50% upside to Morgan Stanley's price target. At its current price, the stock is reflecting that steady-state earnings would be cut in half, an unlikely scenario, analysts wrote. "This makes current risk-reward look very favorable even in a potential recession scenario – with limited near-term downside and potential for significant upside, especially if idiosyncratic catalysts deliver," analysts wrote. That's an attractive valuation, especially given that XPO's starting point was not extremely elevated – it's currently trading at roughly half of its peer valuations, or 9 times next twelve months' earnings, signaling risks are already fully priced in. In addition, XPO's March announcement that it will spin off its Brokerage and Forwarding businesses is on-track and could add shareholder value. "Even the spin itself provides an idiosyncratic catalyst that should keep investors interested at a time when the macro is not supportive of the space," the analysts said. The company is also improving their less-than-truckload space, which Morgan Stanley sees as a positive that sets XPO up for a higher chance of success than its freight peers. Of course, there is downside risk for XPO – management's spin of certain businesses could derail, or the U.S. could fall into a deep consumer recession and further damage the trucking space. However, Morgan Stanley sees XPO as well positioned in either scenario. "We do not need to make aggressive assumptions to get big upside," the analysts said.