United Parcel (UPS) AI Stock Analysis

• Market Cap: $91.68B
• Dividend Yield: 6.55%
• Average Volume (3M): 5.29M
• Price to Earnings (P/E): 16.7
• Beta (1Y): 0.78
• Revenue Growth: -1.25%
• EPS Growth: -2.25%
• Country: US
• Employees: 490,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Integrated Freight & Logistics
• EPS (TTM): 1.74
• Shares Outstanding: 738,990,050
• 10 Day Avg. Volume: 4,421,765
• 30 Day Avg. Volume: 5,290,611
• PEG Ratio: -1.39
• Price to Book (P/B): 6.45
• Price to Sales (P/S): 1.19
• P/FCF Ratio: 17.35
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 1.04
• Enterprise Value/Gross Profit: 5.77
• Enterprise Value/Ebitda: 8.06
• 1Y Price Target: $107.06
• Price Target Upside: 0.08% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: $120.00 ▲(12.18% Upside)

UPS's overall score reflects strong cash flow and reasonable valuation, offset by challenges in revenue growth and strategic uncertainties. Positive technical indicators and a high dividend yield support the stock, but mixed earnings call results and the impact of corporate events weigh on the outlook.

Positive Factors

Strong Cash Flow Generation

Robust cash flow growth enhances financial flexibility, allowing UPS to invest in strategic initiatives and weather economic downturns.

Health Care and SMB Growth

Growth in health care and SMBs diversifies revenue streams and strengthens UPS's market position in high-demand sectors.

International Volume Growth

Consistent international volume growth indicates strong global demand and enhances UPS's competitive edge in international logistics.

Negative Factors

Decline in U.S. Domestic Volume

A decline in domestic volume could impact UPS's core revenue streams and necessitate strategic adjustments to maintain growth.

MD-11 Fleet Grounding

Grounding of MD-11s disrupts operations, potentially affecting service reliability and increasing operational costs during peak periods.

International Margin Pressure

Margin pressure in international operations could reduce profitability and require strategic realignment to maintain competitive pricing.

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 from its package delivery services, which include both domestic and international shipments. The company charges customers based on weight, dimensions, distance, and delivery speed. Additionally, UPS earns significant income from its freight services, which includes less-than-truckload (LTL) and full-truckload (FTL) shipping solutions for businesses. The company's logistics and supply chain services also contribute to its revenue, providing tailored solutions to optimize inventory and distribution for its clients. Partnerships with major retailers and e-commerce platforms enhance UPS's earnings by offering shipping and logistics solutions for online orders. Furthermore, UPS invests in technology and infrastructure, allowing for operational efficiencies that can drive profitability. Key factors contributing to its earnings include the growth of e-commerce, demand for reliable delivery services, and strategic acquisitions that expand its service capabilities.

United Parcel Financial Statement Overview

Summary

UPS is facing challenges with declining revenue growth and profitability margins. However, strong cash flow generation and a solid return on equity provide a buffer against increased leverage risks. Continued focus on operational efficiency and revenue growth is crucial.

Income Statement

UPS has shown a decline in revenue growth with a negative rate of -1.08% in the TTM period, indicating challenges in maintaining sales momentum. The gross profit margin has decreased significantly from previous years, currently at 5.88% in TTM, which is a concern for profitability. However, the net profit margin remains stable at 6.15%, suggesting effective cost management. The EBIT and EBITDA margins have also decreased, reflecting pressure on operational efficiency.

Balance Sheet

The debt-to-equity ratio has increased to 1.61 in TTM, indicating higher leverage, which could pose a risk if not managed carefully. Return on equity is strong at 34.41%, showcasing efficient use of equity to generate profits. The equity ratio is relatively stable, suggesting a balanced approach to financing assets.

Cash Flow

UPS has demonstrated a strong free cash flow growth rate of 40.87% in TTM, indicating improved cash generation capabilities. The operating cash flow to net income ratio is at 0.58, showing a healthy conversion of income to cash. The free cash flow to net income ratio is 0.52, reflecting solid cash flow management despite lower net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	89.37B	90.89B	90.75B	100.03B	97.20B	84.43B
Gross Profit	16.17B	17.06B	17.71B	20.08B	17.43B	21.78B
EBITDA	11.59B	11.91B	12.71B	18.71B	20.23B	5.23B
Net Income	5.50B	5.78B	6.71B	11.55B	12.89B	1.34B
Balance Sheet
Total Assets	71.39B	70.07B	70.86B	71.12B	69.41B	62.41B
Cash, Cash Equivalents and Short-Term Investments	6.83B	6.32B	6.04B	7.59B	10.59B	6.32B
Total Debt	29.21B	25.65B	26.73B	23.52B	25.53B	27.75B
Total Liabilities	55.54B	53.33B	53.54B	51.32B	55.14B	61.74B
Stockholders Equity	15.82B	16.72B	17.31B	19.79B	14.25B	657.00M
Cash Flow
Free Cash Flow	4.40B	6.21B	5.08B	9.34B	10.81B	5.05B
Operating Cash Flow	8.46B	10.12B	10.24B	14.10B	15.01B	10.46B
Investing Cash Flow	-3.79B	-217.00M	-7.13B	-7.47B	-3.82B	-5.28B
Financing Cash Flow	-3.79B	-6.85B	-5.53B	-11.19B	-6.82B	-4.52B

United Parcel Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 106.97
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UPS, the sentiment is Positive. The current price of 106.97 is above the 20-day moving average (MA) of 102.17, above the 50-day MA of 97.93, and above the 200-day MA of 93.58, indicating a bullish trend. The MACD of 2.68 indicates Negative momentum. The RSI at 76.40 is Negative, neither overbought nor oversold. The STOCH value of 86.95 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UPS.

United Parcel Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EXPD	80 Outperform	$21.29B	25.86	36.47%	1.02%	12.54%	19.59%
FDX	79 Outperform	$73.44B	17.23	15.87%	1.94%	3.09%	14.94%
ZTO	73 Outperform	$17.15B	14.55	13.83%	2.98%	12.89%	3.12%
UPS	72 Outperform	$91.68B	16.70	33.67%	6.55%	-1.25%	-2.25%
CHRW	72 Outperform	$20.17B	34.61	34.32%	1.51%	-7.08%	71.39%
XPO	70 Outperform	$17.22B	52.52	19.26%	―	-0.30%	-11.02%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%