UPS: Volume Pressures, Constrained Growth, and Limited Upside Support Sell Rating and $99 Target

Analyst Ken Hoexter of Bank of America Securities reiterated a Sell rating on United Parcel, boosting the price target to $99.00.

Ken Hoexter has given his Sell rating due to a combination of factors tied to United Parcel’s volume outlook, cost structure, and valuation. He notes that while domestic package volumes in the fourth quarter are declining slightly less than previously feared, they are still down meaningfully year over year, and the company is facing added leasing expenses to compensate for grounded aircraft. UPS is also intentionally reducing its exposure to Amazon volumes, with daily package flows from Amazon expected to fall by up to 1.0–1.5 million per day by mid‑2026, which constrains future revenue growth even as management works to capture cost savings from network changes and a new USPS agreement. Overall, he sees cost control as solid, but believes these efforts are largely defensive against softer demand rather than a driver of robust earnings growth.

Ken also highlights that international operations are relying on pricing gains to offset shrinking volumes, and that the supply chain segment is running slightly below his prior revenue expectations, indicating a less dynamic growth profile across the portfolio. Although UPS is targeting respectable margin levels in both its domestic and international businesses, Hoexter’s earnings projections do not justify a higher multiple in his view. He values the stock at 14.0x his 2026 earnings estimate, which yields a price objective of $99, below the current share price at the time of his report. Because his target price sits under the market price and earnings upside appears limited amid continued volume pressures, he concludes that the risk‑reward is unfavorable and maintains a Sell (Underperform) recommendation.

Hoexter covers the Industrials sector, focusing on stocks such as CSX, CH Robinson, and Canadian National Railway. According to TipRanks, Hoexter has an average return of 2.2% and a 49.10% success rate on recommended stocks.