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United Parcel Service (UPS)
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United Parcel (UPS) AI Stock Analysis

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UPS

United Parcel

(NYSE:UPS)

Rating:67Neutral
Price Target:
$93.00
â–²(7.17% Upside)
UPS's overall score is primarily influenced by strong valuation metrics and a solid financial foundation. However, negative technical indicators and mixed sentiment from the latest earnings call, coupled with operational challenges, weigh down the score. The positive impact of recent corporate governance changes provides some support.
Positive Factors
Cost Management
UPS continues to cut structural costs, which is seen as a positive step amidst external challenges.
Efficiency Initiatives
Efficiency Re-imagined initiatives are on track to drive $500m in savings in 2025 and another $500m in 2026.
Valuation
With valuation at a modest 12.4x P/E and 7.1x EV/EBITDA, the risk/reward is biased to the upside.
Negative Factors
Amazon Revenue Reduction
The removal of 50% of Amazon revenues by mid-2026 is expected to impact UPS negatively, contributing to earnings pressure.
Guidance Withdrawal
UPS has withdrawn its guidance for the next quarter and full-year revenue and margins due to elevated tariff and peak season uncertainty.
Tariff Impact
Loss of de minimis exemption and concurrent US tariff hike versus China has led to a significant reduction in volumes for UPS.

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:Jul 29, 2025
(Q2-2025)
|
% Change Since: -14.57%|
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted several strategic initiatives and growth areas, such as healthcare logistics and international trade lane adjustments, which showed positive momentum. However, significant challenges such as declining U.S. consumer sentiment, operational issues with the Ground Saver product, and uncertainties around trade policies and Amazon volume glide down efforts created a negative sentiment. The lack of forward-looking guidance also reflects the uncertainties and pressures faced by UPS.
Q2-2025 Updates
Positive Updates
Consolidated Revenue and Profit
In the second quarter of 2025, UPS reported consolidated revenue of $21.2 billion and an operating profit of $1.9 billion, with a consolidated operating margin of 8.8%.
Healthcare Logistics Growth
UPS reported strong growth in healthcare logistics, which remains a key driver of growth across all business segments. Healthcare logistics revenue grew by 5.7% in the Supply Chain Solutions segment.
Efficiency Reimagined Initiatives
UPS launched 'Efficiency Reimagined' initiatives in the first quarter and accelerated them in the second quarter, aiming to redesign end-to-end processes and drive savings.
International Trade Lane Adjustments
Despite a 34.8% decline in China to U.S. trade lane volume in May and June, UPS saw a 22.4% increase in volume from China to the rest of the world trade lanes.
Negative Updates
U.S. Consumer Sentiment and Volume Decline
The U.S. small package market was impacted by near historic lows in U.S. consumer sentiment, leading to a 7.3% decline in overall U.S. average daily volume.
Challenges with Ground Saver Product
UPS faced challenges with its Ground Saver product, experiencing a 23% year-over-year decline in volume and higher-than-expected delivery expenses, impacting financial results.
Amazon Volume Glide Down and Attrition Issues
The Amazon volume glide down strategy faced challenges with lower-than-expected attrition rates, resulting in higher expenses. Full-time driver voluntary separation programs are in place to address this.
Trade Policy Uncertainties
Uncertainties around trade policies, including tariffs and their impacts on customer demand, have created significant volatility and challenges in forecasting demand, leading to a lack of forward-looking revenue or earnings guidance.
Company Guidance
During the UPS Second Quarter 2025 Earnings Conference Call, various metrics and guidance were discussed. The company reported consolidated revenue of $21.2 billion, a consolidated operating profit of $1.9 billion, and an operating margin of 8.8%. Diluted earnings per share were $1.55. UPS experienced a 7.3% decline in U.S. average daily volume, with a revenue decline of just 0.8% due to strategic actions. The international segment saw a 3.9% increase in average daily volume, with a 15.2% operating margin. UPS is on track to remove approximately $3.5 billion in expenses this year, with significant reductions in operational hours and positions. Despite uncertainties in trade policies and consumer sentiment, the company is focusing on its Efficiency Reimagined initiatives and strategic actions, including the Amazon volume glide down, to strengthen its competitive positioning. UPS did not provide forward-looking revenue or earnings guidance due to the volatile environment but confirmed capital expenditures of approximately $3.5 billion and expected dividend payouts of around $5.5 billion for 2025.

United Parcel Financial Statement Overview

Summary
UPS demonstrates strong financial health with solid profitability and efficient cash flow management. Despite flat revenue growth and moderate leverage, the company maintains robust operational and cash flow margins, which positions it well within the industry.
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue90.31B91.07B90.96B100.34B97.29B84.63B
Gross Profit17.38B19.36B17.23B13.09B12.81B7.81B
EBITDA11.77B11.91B12.71B17.00B15.82B10.37B
Net Income5.73B5.78B6.71B11.55B12.89B1.34B
Balance Sheet
Total Assets70.92B70.07B70.86B71.12B69.41B62.49B
Cash, Cash Equivalents and Short-Term Investments6.29B6.32B6.07B7.59B10.59B6.32B
Total Debt28.91B25.65B26.73B23.52B25.53B27.75B
Total Liabilities55.15B53.33B53.54B51.32B55.14B61.74B
Stockholders Equity15.75B16.72B17.31B19.79B14.25B741.00M
Cash Flow
Free Cash Flow3.54B6.21B5.08B9.34B10.81B5.05B
Operating Cash Flow7.48B10.12B10.24B14.10B15.01B10.46B
Investing Cash Flow-3.15B-217.00M-7.13B-7.47B-3.82B-5.28B
Financing Cash Flow-4.60B-6.85B-5.53B-11.19B-6.82B-4.52B

United Parcel Technical Analysis

Technical Analysis Sentiment
Negative
Last Price86.78
Price Trends
50DMA
98.68
Negative
100DMA
99.63
Negative
200DMA
111.13
Negative
Market Momentum
MACD
-3.75
Positive
RSI
30.64
Neutral
STOCH
5.80
Positive
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 86.78 is below the 20-day moving average (MA) of 96.80, below the 50-day MA of 98.68, and below the 200-day MA of 111.13, indicating a bearish trend. The MACD of -3.75 indicates Positive momentum. The RSI at 30.64 is Neutral, neither overbought nor oversold. The STOCH value of 5.80 is Positive, 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 (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$15.91B12.5615.68%3.46%13.41%10.00%
74
Outperform
$52.47B12.9314.68%2.57%0.27%-2.64%
72
Outperform
$15.93B19.0839.01%1.29%24.07%27.40%
67
Neutral
$0.0012.6434.96%7.74%0.95%9.62%
66
Neutral
$13.74B26.4832.43%2.18%-2.55%59.07%
64
Neutral
$13.87B26.0314.33%1.25%-2.24%-5.43%
64
Neutral
$10.63B16.035.49%2.12%2.74%-23.62%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
UPS
United Parcel
86.78
-29.89
-25.62%
CHRW
CH Robinson
116.32
20.94
21.95%
EXPD
Expeditors International
116.31
0.88
0.76%
FDX
FedEx
222.41
-49.75
-18.28%
JBHT
JB Hunt
143.24
-18.34
-11.35%
ZTO
ZTO Express
19.72
0.81
4.28%

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
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 01, 2025