The stock of United Parcel Service (UPS) has been upgraded by BMO Capital Markets (BMO), which sees the struggling company’s share price reversing higher in the New Year.
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Fadi Chamoun, a five-star rated analyst at BMO, upgraded UPS stock to Buy from Hold, although he lowered his price target on the shares to $150 from $155. The lowered price target is 15% higher than where the stock currently trades.
In upgrading UPS stock to a Buy recommendation, Chamoun said that he sees a bottom forming for the struggling shipping and logistics company. So far in 2024, United Parcel Service’s stock has declined 14%, reflecting a slowdown in business since the Covid-19 pandemic ended.
Time to Buy UPS Stock?
In his report, Chamoun noted that he still has some concerns about UPS, mainly about profit-margin improvement, but believes there is a good entry point in the stock right now with the shares trading around $130.
“A combination of cyclical tailwinds; moderating unit cost-inflationary pressures, including positive contribution from cost-reduction programs; and low valuation render the near-term risk/reward favorable,” he wrote about UPS.
The valuation on UPS stock does look attractive right now, with the shares trading for less than 15 times estimated 2025 earnings.
Is UPS Stock a Buy?
The stock of United Parcel Service has a consensus Moderate Buy among 19 Wall Street analysts. That rating is based on eight Buy, 10 Hold, and one Sell recommendations issued in the last three months. The average UPS price target of $143.12 implies 9.84% upside from current levels.
