FDX edges past UPS on valuation, cost-cutting gains, and financial strength as both firms battle weak parcel demand.
United Parcel Service (UPS) closed the most recent trading day at $102.38, moving +1.52% from the previous trading session.
United Parcel Service trims 20,000 jobs, offers driver buyouts and shuts facilities to cut costs amid weak demand and rising labor expenses.
UPS announced in April it was cutting 20,000 jobs and closing 73 facilities.
United Parcel Service (UPS) closed the most recent trading day at $105.54, moving +1.02% from the previous trading session.
After a challenging year, United Parcel Service NYSE: UPS is showing its investors a welcome sight: green arrows. The transportation sector stock has gained over 5% in the last month, a notable reversal that has outpaced the broader S&P 500 index.
UPS trades at a premium to the industry, but soft demand, high costs, and falling estimates raise near-term caution flags.
UPS is a value Buy for long-term investors, with margin-driven upside potential but significant execution and macro risks to monitor. Key risks include Amazon volume loss, restructuring execution, tariff headwinds, and intensifying competition from FedEx and Amazon's logistics arm. Strategic healthcare logistics expansion and aggressive cost restructuring aim to offset revenue declines and drive higher long-term margins.
UPS remains undervalued with a P/S ratio near multi-year lows, reflecting excessive market pessimism. Q1 results were mixed: revenue dipped but beat expectations, while EPS and margins improved. Guidance for Q2 is weak with further revenue declines expected. However, these projections are not extraordinarily poor vs. the previous three years.
There are three secular trends coinciding and creating a confluence of long-term tailwinds for United Parcel Service. UPS's 10-year dividend growth rate is 9.3%, although this was skewed higher by a ~50% dividend boost in early 2022. UPS moved its revenue from $58.4 billion in FY 2015 to $91.1 billion in FY 2024. That's a compound annual growth rate of 5.1%.
United Parcel Service (UPS) concluded the recent trading session at $101.09, signifying a +1.09% move from its prior day's close.
CPA's strong margins, upbeat demand, and rising estimates make it a standout dividend stock over UPS currently.