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Valued at a market cap of $83.6 billion, United Parcel Service, Inc. (UPS) is a package delivery and logistics provider based in Atlanta, Georgia, offering transportation and delivery services.
This freight and logistics company has underperformed the broader market over the past 52 weeks. Shares of UPS have declined 1.2% over this time frame, while the broader S&P 500 Index ($SPX) has soared 26.6%. Moreover, on a YTD basis, the stock is down marginally, compared to SPX’s 8.1% rise.
Looking more closely, UPS has also lagged the Pacer Industrials and Logistics ETF (SHPP), which has soared 22.1% over the past 52 weeks and 13.8% on a YTD basis.
On May 4, shares of UPS tumbled 10.5% after Amazon (AMZN) unveiled Amazon Supply Chain Services (ASCS). The new end-to-end logistics platform makes Amazon’s extensive freight, warehousing, fulfillment, and parcel delivery network available to businesses of all sizes, raising concerns about heightened competition in the logistics industry.
For the current fiscal year, ending in December, analysts expect UPS’ EPS to decline marginally year over year to $7.10. The company’s earnings surprise history is mixed. It topped the consensus estimates in three of the last four quarters, while missing on another occasion.
Among the 28 analysts covering the stock, the consensus rating is a "Moderate Buy,” which is based on 11 “Strong Buy,” one "Moderate Buy,” 13 “Hold,” one "Moderate Sell,” and two "Strong Sell” ratings.
The configuration has remained consistent over the past three months.
On May 5, Thomas Wadewitz from UBS maintained a “Buy” rating on UPS, with a price target of $123, indicating a 25% potential upside from the current levels.
The mean price target of $115.58 suggests a 17.4% premium to its current price levels, while its Street-high price target of $135 implies a 37.2% potential upside.
