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United Parcel (UPS)
NYSE:UPS

United Parcel (UPS) AI Stock Analysis

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United Parcel

(NYSE:UPS)

Rating:73Outperform
Price Target:
$108.00
▲(11.49%Upside)
UPS is well-positioned financially, with strong cash flow management and profitability. While the valuation is attractive due to a low P/E ratio and high dividend yield, technical indicators suggest bearish momentum. The earnings call highlighted strategic progress and challenges, balancing the outlook. Overall, UPS's strong financial foundation and valuation appeal are offset by current market momentum and external uncertainties.
Positive Factors
Cost Savings
UPS accelerates its cost reduction program, targeting $3.5 billion in savings by 2025, which aims to improve structural margins.
Global Supply Chain
UPS is well positioned to respond to and uniquely benefit from global supply chain shocks with its integrated global logistics network.
Revenue and Earnings
UPS's consolidated revenue was $21.6 billion, exceeding the analyst's estimate and showing a year-over-year increase.
Negative Factors
Earnings Guidance
The 2Q guidance from UPS is below expectations, with a decline in U.S. Domestic margin and a significant reduction in demand in the China-to-U.S. trade lane.
Stock Rating Downgrade
The decline in volumes from Amazon and the impact of US tariffs have been underestimated, contributing to a downgrade in stock rating.
Tariff Impact
Tariff headwinds are weighing on the outlook for United Parcel Service, overshadowing other positive factors.

United Parcel (UPS) vs. SPDR S&P 500 ETF (SPY)

United Parcel Business Overview & Revenue Model

Company DescriptionUnited Parcel Service (UPS) is a global leader in logistics, offering a broad range of solutions including the transportation of packages and freight, the facilitation of international trade, and the deployment of advanced technology to more efficiently manage the world of business. Operating in the courier, logistics, and freight sectors, UPS provides services such as package delivery, supply chain management, and specialized transportation solutions across various industries.
How the Company Makes MoneyUPS generates revenue primarily through its three main business segments: U.S. Domestic Package, International Package, and Supply Chain & Freight. The U.S. Domestic Package segment makes money by delivering packages to businesses and residences within the United States. The International Package segment earns revenue from delivering parcels and freight to international destinations. The Supply Chain & Freight segment generates income by offering logistics services, including freight forwarding, truckload brokerage, and distribution. UPS also benefits from strategic partnerships and investments in technology that enhance operational efficiency and customer service, thus contributing to its profitability. Furthermore, UPS charges additional fees for expedited shipping, oversized packages, and other value-added services, which bolster its revenue streams.

United Parcel Key Performance Indicators (KPIs)

Any
Any
Average Daily Packages
Average Daily Packages
Indicates the volume of packages handled daily, highlighting operational scale, efficiency, and demand trends in the logistics network.
Chart InsightsUPS's domestic package volume shows a gradual decline from its pandemic peak, reflecting strategic shifts and reduced Amazon volume. Despite this, the U.S. domestic segment improved profitability, driven by margin expansion and a focus on SMBs. International volume growth, particularly in exports, contrasts with declining operating margins due to a shift towards economy services. The earnings call highlights UPS's focus on network efficiency and revenue quality, yet global trade uncertainties and reduced Amazon volumes pose ongoing challenges. Strategic initiatives like the 'Ground Saver' service and healthcare expansion aim to counterbalance these pressures.
Data provided by:Main Street Data

United Parcel Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: 1.41%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While there were significant efforts and achievements in network reconfiguration, segment growth, and strategic acquisitions, the company faces challenges due to revenue decline, uncertain trade policies, and decreased Amazon volume. The balance between positive internal progress and external uncertainties results in a neutral sentiment.
Q1-2025 Updates
Positive Updates
U.S. Domestic Segment Performance
U.S. domestic segment increased operating profit by $164 million year-over-year and expanded operating margin by 110 basis points.
International Segment Growth
International average daily volume increased 7.1%, driven by a 9.3% increase in export volume. Asia and Europe delivered double-digit export growth throughout the quarter.
Digital Access Program (DAP) Growth
Global DAP revenue grew by 24% year-over-year, contributing to a higher concentration of SMB customers in the U.S. volume.
Acquisition of Andlauer Healthcare Group
UPS entered an agreement to acquire Andlauer Healthcare Group to bolster healthcare capabilities in Canada, enhancing its position in complex healthcare logistics.
Network Reconfiguration and Efficiency Initiatives
The company is executing the largest network reconfiguration in its history, aiming to close 73 buildings by June and achieve $3.5 billion in cost reductions in 2025.
Negative Updates
Revenue Decline
Consolidated revenue was $21.5 billion, a decrease of 0.7% versus last year, due to uncertainty in global trade policies and muted demand from enterprise and SMB customers.
Amazon Volume Decline
Amazon's average daily volume (ADV) decline was higher than expected, with a 16% decline in the first quarter, impacting U.S. air and ground volume.
Tariff and Trade Policy Uncertainty
Uncertainty surrounding tariffs, especially China-related tariffs, is causing demand shifts and impacting SMBs that are heavily reliant on Chinese imports.
International Operating Margin Decline
International segment operating profit declined by 4.1% year-over-year due to a mix shift to more economy services in Europe and lower demand-related surcharges.
Supply Chain Solutions Revenue Decrease
Revenue decreased by $471 million in Supply Chain Solutions due to the divestiture of Coyote and cost pressures in the Mail Innovations business.
Company Guidance
During the UPS first quarter 2025 earnings call, the company reported a consolidated revenue of $21.5 billion, a 0.7% decline compared to the previous year, while consolidated operating profit increased by 0.9% to $1.8 billion. The operating margin improved by 20 basis points to 8.2%, with diluted earnings per share rising 4.2% to $1.49. The U.S. domestic segment saw an increase in operating profit by $164 million and an expansion of the operating margin by 110 basis points. International outbound volume grew by 9.5%, despite a challenging trade environment. The company is executing strategic actions, including the reduction of Amazon volume by more than 50% by 2026, a network reconfiguration with 73 building closures by June, and the launch of a new "Ground Saver" service, replacing SurePost. UPS maintained its focus on improving revenue quality in sectors like Healthcare and SMBs, with the first quarter seeing SMBs account for 31.2% of total U.S. volume and Digital Access Program revenue growing by 24% year-over-year. However, the company did not update its full-year outlook due to market uncertainties, particularly surrounding global trade policies, but provided guidance for the second quarter, anticipating a U.S. domestic margin of approximately 9.3%.

United Parcel Financial Statement Overview

Summary
UPS demonstrates strong financial health, with solid profitability and efficient cash flow management. The company maintains healthy margins and effective cost control, although revenue growth is stagnant. The balance sheet shows moderate leverage, which is manageable but requires monitoring.
Income Statement
78
Positive
UPS has shown strong profitability with a consistent EBIT and EBITDA margin. The TTM gross profit margin is healthy at approximately 19%, and the net profit margin is around 6.45%, indicating efficient cost management. However, the revenue growth has been relatively flat, with a slight decline in the TTM compared to the previous reporting period. The company has maintained robust operational margins, which suggests operational efficiency despite revenue stagnation.
Balance Sheet
70
Positive
The company's balance sheet demonstrates moderate leverage with a debt-to-equity ratio around 1.63, indicating reliance on debt but within industry norms. Return on equity stands at around 37.4% TTM, reflecting strong earnings relative to equity. However, the equity ratio is approximately 22.9%, showing limited equity financing, which could be a potential risk if liabilities increase.
Cash Flow
82
Very Positive
UPS exhibits strong cash flow management, with a solid operating cash flow to net income ratio over 1.5, indicating efficient cash generation from operations. The free cash flow growth rate has been positive, showcasing effective capital expenditure control and cash flow generation. The free cash flow to net income ratio is substantial, highlighting strong cash conversion efficiency. These factors contribute to a favorable cash flow position.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
90.86B91.07B90.96B100.34B97.29B84.63B
Gross Profit
17.38B16.36B17.23B13.09B12.81B7.81B
EBIT
8.51B8.47B9.14B13.09B17.27B2.64B
EBITDA
11.95B11.91B12.71B17.00B15.82B10.37B
Net Income Common Stockholders
5.86B5.78B6.71B11.55B12.89B1.34B
Balance SheetCash, Cash Equivalents and Short-Term Investments
5.07B6.32B6.07B7.59B10.59B6.32B
Total Assets
68.47B70.07B70.86B71.12B69.41B62.49B
Total Debt
25.59B25.65B26.73B23.52B25.53B27.75B
Net Debt
20.79B19.54B23.52B17.92B15.27B21.84B
Total Liabilities
52.78B53.33B53.54B51.32B55.14B61.74B
Stockholders Equity
15.66B16.72B17.31B19.79B14.25B741.00M
Cash FlowFree Cash Flow
5.37B6.21B5.08B9.34B10.81B5.05B
Operating Cash Flow
9.12B10.12B10.24B14.10B15.01B10.46B
Investing Cash Flow
-3.14B-217.00M-7.13B-7.47B-3.82B-5.28B
Financing Cash Flow
-5.50B-6.85B-5.53B-11.19B-6.82B-4.52B

United Parcel Technical Analysis

Technical Analysis Sentiment
Negative
Last Price96.87
Price Trends
50DMA
97.55
Negative
100DMA
107.26
Negative
200DMA
116.42
Negative
Market Momentum
MACD
-0.06
Negative
RSI
47.97
Neutral
STOCH
76.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UPS, the sentiment is Negative. The current price of 96.87 is below the 20-day moving average (MA) of 97.48, below the 50-day MA of 97.55, and below the 200-day MA of 116.42, indicating a bearish trend. The MACD of -0.06 indicates Negative momentum. The RSI at 47.97 is Neutral, neither overbought nor oversold. The STOCH value of 76.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for UPS.

United Parcel Risk Analysis

United Parcel disclosed 22 risk factors in its most recent earnings report. United Parcel reported the most risks in the “Macro & Political” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

United Parcel Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
FDFDX
77
Outperform
$52.66B13.8014.74%2.52%0.34%-8.45%
76
Outperform
$11.43B23.0032.11%2.57%-0.22%65.52%
75
Outperform
$15.28B18.4537.70%1.31%24.07%27.40%
UPUPS
73
Outperform
$83.05B14.3135.96%6.64%1.30%-0.76%
ZTZTO
67
Neutral
$13.63B10.8915.68%3.99%13.41%10.00%
66
Neutral
$4.49B12.285.32%248.53%4.08%-12.00%
65
Neutral
$13.90B25.2613.97%1.24%-3.82%-12.80%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
UPS
United Parcel
96.87
-33.27
-25.56%
CHRW
CH Robinson
95.51
9.87
11.52%
EXPD
Expeditors International
111.15
-12.76
-10.30%
FDX
FedEx
216.73
-28.41
-11.59%
JBHT
JB Hunt
139.12
-18.20
-11.57%
ZTO
ZTO Express
17.04
-5.99
-26.01%

United Parcel Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
UPS Appoints John Morikis to Board of Directors
Positive
Jun 2, 2025

On June 2, 2025, UPS announced the appointment of John Morikis to its Board of Directors, expanding the board to thirteen members. Morikis, who is the retired Chairman, President, and CEO of Sherwin-Williams, brings extensive experience in global operations and business transformation, which is expected to enhance UPS’s strategic direction and governance. His expertise in industry shifts and supply chain optimization will be valuable to UPS as it continues to innovate and lead in the logistics sector.

The most recent analyst rating on (UPS) stock is a Buy with a $150.00 price target. To see the full list of analyst forecasts on United Parcel stock, see the UPS Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
United Parcel Sells $170M in Senior Notes
Neutral
May 20, 2025

On May 15, 2025, United Parcel entered into an agreement to sell $170,673,000 in Floating Rate Senior Notes due 2075 to underwriters, with the proceeds intended for general corporate purposes. This transaction is part of the company’s financial strategy and may impact its operations by providing additional capital, potentially affecting its market positioning and stakeholders.

The most recent analyst rating on (UPS) stock is a Buy with a $150.00 price target. To see the full list of analyst forecasts on United Parcel stock, see the UPS Stock Forecast page.

Private Placements and Financing
United Parcel Sells $4 Billion in Senior Notes
Neutral
May 14, 2025

On May 12, 2025, United Parcel entered into an agreement with underwriters to sell $4 billion in senior notes with varying interest rates and maturities, including 4.650% notes due 2030 and 6.050% notes due 2065. The proceeds from this transaction are intended for general corporate purposes, potentially impacting the company’s financial flexibility and market positioning.

The most recent analyst rating on (UPS) stock is a Buy with a $150.00 price target. To see the full list of analyst forecasts on United Parcel stock, see the UPS Stock Forecast page.

Shareholder Meetings
United Parcel Shareholders Meeting Approves Key Proposals
Neutral
May 12, 2025

On May 8, 2025, United Parcel held its Annual Meeting of Shareholders where several key proposals were voted on. All twelve director nominees were elected, the executive compensation was approved on an advisory basis, and Deloitte & Touche LLP was ratified as the independent registered public accounting firm for the year ending December 31, 2025. However, two shareowner proposals, one to reduce the voting power of UPS class A stock and another to prepare a report on risks from voluntary carbon-reduction commitments, did not pass.

The most recent analyst rating on (UPS) stock is a Buy with a $150.00 price target. To see the full list of analyst forecasts on United Parcel stock, see the UPS Stock Forecast page.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.