UPS Buy Rating Affirmed Amid Transformation and Growth Prospects Despite ChallengesWe see shares reflecting increasing signs of investor capitulation on macro uncertainty and persistent earnings pressure. We continue to view UPS as “cheap” and existential risk concerns as overdone, but acknowledge the hurdle to restore investor confidence is steep, leaving shares under pressure until signs of macro/earnings inflection emerge. Fundamentals — The EPS beat (vs. Citi) was on rev. ($21.2bil., -2.7% y-y, vs. Citi $20.9bil., -4.1%) due to a Ground vol. beat (-6.6% y-y vs. Citi -9%), with higher SMB/B2B mix, less Ground Saver (formerly SurePost, insourced from USPS since start of ‘25) mix, and lighter-than-expected AMZN glide-down. Supporting the rev. beat was an Int’l Export vol. beat (+6.1% y-y vs. Citi +5%), driven by 20%+ growth in China-to-rest-of-world vol. despite a 34.8% decline in China-to-U.S. vol. Consol.