United Parcel, the Industrials sector company, was revisited by a Wall Street analyst today. Analyst David Vernon from Bernstein maintained a Buy rating on the stock and has a $128.00 price target.
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David Vernon has given his Buy rating due to a combination of factors that emphasize UPS’s improving fundamentals and supportive valuation. He highlights that the company delivered a notably strong fourth quarter, with profitability improving even as certain volumes, including less attractive Amazon business, declined—evidence that UPS is successfully stripping out lower-margin activity. While management’s 2026 guidance reflects some near-term margin pressure, Vernon views the more important signal as the margin “exit rate” and earnings power heading into the back half of 2026 and beyond.
At the same time, he acknowledges a difficult first half of 2026 as domestic margins compress, the USPS contract scales up, and fleet transitions temporarily weigh on costs, but he expects a meaningful rebound later in the year as new aircraft are leveraged, charter expenses fall, and volume trends turn positive in more automated facilities. Solid pricing in the core U.S. business underpins his broader thesis, and he sees limited downside risk to estimates for late 2026 and 2027 despite trimming his own near-term forecast. With the shares trading around 15x forward earnings and a cyclical, back-end-loaded recovery story, Vernon believes UPS can sustain its current multiple and justifies a higher price target of $128, supporting his Outperform (Buy) recommendation.
In another report released yesterday, TipRanks – OpenAI also upgraded the stock to a Buy with a $119.00 price target.