What happened

A day after XPO (XPO 2.15%) poached a key executive from a rival, Wall Street is weighing in on the wisdom of the move. Investors like what they are hearing, sending shares of XPO up as much as 10% in Friday trading.

So what

XPO is a provider of less-than-truckload (LTL) trucking services, an industry term for the business of transporting smaller shipments from multiple customers in a single truck.

It's a complicated business, but those who do it well are able to generate high margins. Historically, one of the best LTL operators has been Old Dominion Freight Line, and the market reacted with a cheer when XPO announced the hiring of longtime Old Dominion exec Dave Bates as its new chief operating officer.

Wall Street shares the market's optimism. On Friday morning, XPO was upgraded to overweight from neutral at JPMorgan. The company "took a significant step to build credibility" with the hire, according to the analysts, who also raised the bank's price target on the stock to $52, up from $35.

BMO Capital also raised its price target on the stock to $48 from $44, keeping an outperform rating on the shares.

Now what

XPO shares are up more than 30% for the week. That's unusual volatility for a transportation stock, but it is worth noting that even after all those gains, the shares are still below the newly set price targets from the analysts at JPMorgan and BMO.

XPO shares are unlikely to continue to jump by 10% every day, but it appears possible that the hiring of Bates has set a new standard for the stock. It has also reset investor expectations higher. XPO now has to deliver on the promise Wall Street sees up ahead.