It's time for investors to move to the sidelines on XPO , according to Morgan Stanley. Analyst Ravi Shanker downgraded shares to equal weight from overweight following what he considered a lackluster quarter for the less-than-truckload (LTL) shipping company. LTL refers to the transportation of smaller freights that often don't require the use of an entire trailer. "The 4Q print was tougher than expected and we believe the stock could be in a 'penalty box' for a while, as the market seeks more evidence on execution and traction toward LT targets," Shanker wrote in a Monday note. Morgan Stanley is the latest firm downgrading the stock after earnings. Wells Fargo and Jefferies downgraded the logistics firm last week following its fourth-quarter results. XPO posted earnings of 98 cents per share on revenue of $1.83 billion. While Shanker thinks XPO's valuation is still attractive against its peers, he cut his price target to $43 from $55. The new price target still implies shares can advance another 22% from Friday's closing price of $35.22. XPO shares rose more than 5% this year, after falling 27.6% in 2022. The analyst said the stock remains a "show me" story for the time being after it spun off RXO in November. RXO is the fourth-largest U.S. truckload broker. "We wrote in our post-spin note that 'idiosyncratic improvement is both an opportunity and a risk' and that ' investors need a new reason to buy the stock' post spin – the 4Q result and conference call likely leaves a longer path for investors to fully get on board irrespective of the cycle," Shanker wrote. The analyst said other transport companies that are overweight-rated and appear more compelling are ArcBest and TFI International . Shares are up more than 43% and 24% this year, respectively. —CNBC's Michael Bloom contributed to this report.