United Parcel (UPS) AI Stock Analysis

• Market Cap: $74.37B
• Dividend Yield: 7.47%
• Average Volume (3M): 8.50M
• Price to Earnings (P/E): 13.2
• Beta (1Y): 0.88
• Revenue Growth: 0.94%
• EPS Growth: 9.62%
• Country: US
• Employees: 490,000
• Sector: Industrials
• Sector Strength: 75
• Industry: Integrated Freight & Logistics
• EPS (TTM): 1.55
• Shares Outstanding: 736,042,900
• 10 Day Avg. Volume: 9,115,645
• 30 Day Avg. Volume: 8,499,988
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.45
• Enterprise Value/Revenue: 1.57
• Enterprise Value/Gross Profit: 8.43
• Enterprise Value/Ebitda: 11.81
• 1Y Price Target: $105.75
• Price Target Upside: 20.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 20

• Rating: 69 Neutral
• Price Target: $95.00 ▲(8.27% Upside)

UPS's overall stock score reflects a solid financial foundation and attractive valuation, offset by bearish technical indicators and challenges highlighted in the earnings call. The company's strategic initiatives in healthcare logistics and international growth are promising, but domestic volume declines and trade uncertainties pose risks.

Positive Factors

Cost Management

Despite challenges, UPS is confident that its cost-out target is intact, supported by strong free cash flow generation.

Financial Performance

Analyst recommends a Buy rating for UPS shares, as they are trading at trough valuation levels in anticipation of EPS pressure.

Strategic Shifts

Management strategically shifting capital allocation towards higher margin/higher ROIC healthcare and international segments has the potential to be positive for valuation over the medium term.

Negative Factors

Revenue Guidance

UPS has withdrawn its guidance for the next quarter and full-year revenue and margins due to elevated tariff and peak season uncertainty.

Union Pushback

Social media posts suggest the unions are pushing back on the company's planned staff reductions which increases the risk to the downside for 2H at a minimum.

Volume and Margin Pressure

Loss of de minimis exemption and concurrent US tariff hike versus China has led to a significant reduction in volumes for UPS.

United Parcel Business Overview & Revenue Model

Company Description

United Parcel Service, Inc. provides letter and package delivery, transportation, logistics, and related services. It operates through two segments, U.S. Domestic Package and International Package. The U.S. Domestic Package segment offers time-definite delivery of letters, documents, small packages, and palletized freight through air and ground services in the United States. The International Package segment provides guaranteed day and time-definite international shipping services in Europe, the Asia Pacific, Canada and Latin America, the Indian sub-continent, the Middle East, and Africa. This segment offers guaranteed time-definite express options. The company also provides international air and ocean freight forwarding, customs brokerage, distribution and post-sales, and mail and consulting services in approximately 200 countries and territories. In addition, it offers truckload brokerage services; supply chain solutions to the healthcare and life sciences industry; shipping, visibility, and billing technologies; and financial and insurance services. The company operates a fleet of approximately 121,000 package cars, vans, tractors, and motorcycles; and owns 59,000 containers that are used to transport cargo in its aircraft. United Parcel Service, Inc. was founded in 1907 and is headquartered in Atlanta, Georgia.

How the Company Makes Money

UPS generates revenue through multiple streams primarily centered around package delivery services. The company's main revenue sources include its domestic package services, which account for a significant portion of its income through the delivery of parcels within the United States. International package services also contribute to earnings, as UPS facilitates global shipping for businesses and consumers. Additionally, the company earns revenue from freight services, which includes both air and ocean freight, catering to larger shipments and logistics needs. UPS has established significant partnerships with various companies, enhancing its service offerings and expanding its customer base. Furthermore, UPS capitalizes on the growing e-commerce market, providing tailored solutions for online retailers, which has become increasingly lucrative as consumer behavior shifts toward digital shopping.

United Parcel Financial Statement Overview

Summary

UPS maintains a strong financial position with solid profitability margins and efficient cash flow management. However, a slight decline in revenue growth and a dip in return on equity indicate potential areas for improvement.

Income Statement

UPS demonstrates strong profitability with a TTM gross profit margin of approximately 19.2% and a net profit margin of about 6.3%. However, the company has experienced a slight decline in revenue growth from previous periods, evidenced by a TTM revenue decrease from 2024. The EBIT and EBITDA margins remain stable, indicating efficient cost management despite the revenue dip.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 1.83, highlighting a reasonable leverage level for the logistics industry. The equity ratio stands at approximately 22.2%, suggesting a solid capital structure. However, the return on equity has decreased to around 36.4% in the TTM, reflecting slightly reduced profitability for shareholders compared to previous years.

Cash Flow

UPS's cash flow is robust, with a strong operating cash flow to net income ratio of about 1.3, indicating effective cash conversion. The free cash flow growth rate has decreased, reflecting capital expenditure increases. The free cash flow to net income ratio remains healthy, suggesting good liquidity and investment capacity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	68.68B	90.89B	90.75B	100.03B	97.20B	84.43B
Gross Profit	12.83B	17.06B	17.71B	20.08B	17.43B	21.78B
EBITDA	9.15B	11.91B	12.71B	18.71B	20.23B	5.23B
Net Income	4.54B	5.78B	6.71B	11.55B	12.89B	1.34B
Balance Sheet
Total Assets	70.92B	70.07B	70.86B	71.12B	69.41B	62.41B
Cash, Cash Equivalents and Short-Term Investments	6.29B	6.32B	6.04B	7.59B	10.59B	6.32B
Total Debt	28.91B	25.65B	26.73B	23.52B	25.53B	27.75B
Total Liabilities	55.15B	53.33B	53.54B	51.32B	55.14B	61.74B
Stockholders Equity	15.75B	16.72B	17.31B	19.79B	14.25B	657.00M
Cash Flow
Free Cash Flow	2.10B	6.21B	5.08B	9.34B	10.81B	5.05B
Operating Cash Flow	5.16B	10.12B	10.24B	14.10B	15.01B	10.46B
Investing Cash Flow	-1.79B	-217.00M	-7.13B	-7.47B	-3.82B	-5.28B
Financing Cash Flow	-2.29B	-6.85B	-5.53B	-11.19B	-6.82B	-4.52B

United Parcel Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 87.74
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UPS, the sentiment is Neutral. The current price of 87.74 is above the 20-day moving average (MA) of 85.92, below the 50-day MA of 93.77, and below the 200-day MA of 106.08, indicating a neutral trend. The MACD of -1.69 indicates Negative momentum. The RSI at 44.14 is Neutral, neither overbought nor oversold. The STOCH value of 59.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for UPS.

United Parcel Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZTO	79 Outperform	$15.11B	13.06	13.98%	3.65%	14.40%	2.41%
FDX	76 Outperform	$54.96B	14.08	14.68%	2.40%	0.27%	-2.64%
EXPD	72 Outperform	$16.29B	19.58	39.01%	1.25%	23.70%	31.33%
UPS	69 Neutral	$74.37B	13.20	34.96%	7.47%	0.94%	9.62%
CHRW	69 Neutral	$14.93B	28.50	32.43%	1.96%	-2.55%	59.07%
XPO	67 Neutral	$16.18B	47.53	21.10%	―	-0.11%	-4.28%
Sector *	64 Neutral	$10.82B	16.31	8.86%	2.03%	2.58%	-16.43%

United Parcel Corporate Events

UPS Appoints John Morikis to Board of Directors

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.

United Parcel Sells $170M in Senior Notes

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.