United Parcel Service (NYSE:UPS) Shares Up 1% - Time to Buy?

Key Points

• UPS shares rose about 1% to roughly $99.51, while trading volume was below average. Analysts’ consensus rating remains “Hold,” with an average price target of $115.70.
• Recent earnings were stronger than expected, with EPS of $1.76 and revenue of $22.83 billion, supported by higher revenue per package, cost reductions and a favorable business mix.
• Key risks include declining package volumes, rising fuel costs and dividend sustainability: the $6.56 annual dividend yields about 6.6%, but the payout ratio exceeds 120%. The October 27 earnings report will test whether margin improvements can offset weaker shipments.

United Parcel Service, Inc. (NYSE:UPS - Get Free Report) shares were up 1% during mid-day trading on Wednesday. The stock traded as high as $100.29 and last traded at $99.5130. Approximately 4,629,131 shares changed hands during trading, a decline of 17% from the average session volume of 5,603,214 shares. The stock had previously closed at $98.52.

Key Stories Impacting United Parcel Service

Here are the key news stories impacting United Parcel Service this week:

• Positive Sentiment: Analysts at Sanford C. Bernstein reduced their price target from $131 to $127 but maintained an “outperform” rating, implying substantial upside from current levels. The revised target suggests the firm still sees value in UPS despite near-term operating pressures. Bernstein lowers UPS price target but keeps outperform rating
• Positive Sentiment: Recent coverage points to potential earnings support from higher revenue per package, cost reductions and a shift toward higher-margin business. UPS previously exceeded earnings and revenue estimates, giving investors a basis for expecting another potential earnings beat. UPS expected earnings beat
• Neutral Sentiment: The October 27 report is the next major catalyst. Investors will be watching whether management’s strategy of improving profit margins can offset weaker shipment volumes and whether full-year guidance remains achievable. UPS October 27 earnings preview
• Negative Sentiment: U.S. average daily package volume previously declined to 16.0 million from 16.55 million, raising concerns that pricing gains may not fully compensate for lost shipments. Rising fuel costs could add further pressure to third-quarter margins. UPS volume and pricing analysis
• Negative Sentiment: Dividend concerns remain significant after UPS froze its dividend and allocated nearly all free cash flow to shareholder payments. Although the yield is attractive, limited cash-flow flexibility could make the dividend vulnerable if operating conditions deteriorate. UPS dividend sustainability analysis

Analyst Ratings Changes

Several analysts have weighed in on UPS shares. Wall Street Zen downgraded United Parcel Service from a "buy" rating to a "hold" rating in a research note on Saturday, September 19th. Oppenheimer raised their target price on shares of United Parcel Service from $115.00 to $117.00 and gave the company an "outperform" rating in a research note on Wednesday, July 29th. UBS Group raised their price objective on shares of United Parcel Service from $123.00 to $124.00 and gave the company a "buy" rating in a research note on Wednesday, July 29th. BMO Capital Markets upped their target price on United Parcel Service from $110.00 to $115.00 and gave the stock a "market perform" rating in a research report on Wednesday, July 29th. Finally, Evercore boosted their price target on shares of United Parcel Service from $117.00 to $118.00 in a research report on Wednesday, July 29th. One analyst has rated the stock with a Strong Buy rating, eleven have given a Buy rating, eleven have given a Hold rating and three have given a Sell rating to the stock. According to MarketBeat.com, the company has an average rating of "Hold" and a consensus price target of $115.70.

United Parcel Service Stock Up 1.0%

The company has a quick ratio of 1.18, a current ratio of 1.18 and a debt-to-equity ratio of 1.58. The firm has a market capitalization of $84.66 billion, a PE ratio of 18.50, a price-to-earnings-growth ratio of 1.80 and a beta of 1.07. The business's 50-day moving average price is $99.11 and its 200-day moving average price is $103.60.

United Parcel Service (NYSE:UPS - Get Free Report) last announced its quarterly earnings data on Tuesday, July 28th. The transportation company reported $1.76 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.65 by $0.11. United Parcel Service had a return on equity of 37.50% and a net margin of 5.08%. The business had revenue of $22.83 billion during the quarter, compared to analyst estimates of $21.86 billion. During the same period last year, the company earned $1.55 earnings per share. United Parcel Service's quarterly revenue was up 7.6% compared to the same quarter last year. United Parcel Service has set its FY 2026 guidance at 7.220-7.220 EPS. As a group, equities research analysts predict that United Parcel Service, Inc. will post 7.19 EPS for the current fiscal year.

United Parcel Service Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Thursday, September 3rd. Stockholders of record on Monday, August 17th were issued a dividend of $1.64 per share. The ex-dividend date was Monday, August 17th. This represents a $6.56 dividend on an annualized basis and a dividend yield of 6.6%. United Parcel Service's dividend payout ratio (DPR) is currently 121.93%.

Hedge Funds Weigh In On United Parcel Service

Several institutional investors have recently bought and sold shares of UPS. Markowski Investments acquired a new stake in United Parcel Service in the second quarter worth about $30,000. Allied Private Wealth LLC acquired a new position in United Parcel Service during the second quarter valued at approximately $34,000. Legacy Wealth Managment LLC ID grew its stake in United Parcel Service by 48.6% in the first quarter. Legacy Wealth Managment LLC ID now owns 309 shares of the transportation company's stock valued at $30,000 after acquiring an additional 101 shares during the period. Community Financial Services Group LLC lifted its holdings in shares of United Parcel Service by 170.1% during the 2nd quarter. Community Financial Services Group LLC now owns 370 shares of the transportation company's stock valued at $41,000 after purchasing an additional 233 shares in the last quarter. Finally, Grove Bank & Trust lifted its stake in United Parcel Service by 49.8% in the second quarter. Grove Bank & Trust now owns 379 shares of the transportation company's stock valued at $41,000 after buying an additional 126 shares in the last quarter. 60.26% of the stock is currently owned by institutional investors.

About United Parcel Service

United Parcel Service, Inc NYSE: UPS is a global package delivery and logistics company. Its services include the transportation and delivery of packages and freight, time-definite express delivery, supply chain management, customs brokerage, and logistics consulting. UPS serves businesses and consumers through ground, air, and international delivery networks.

The company operates across the United States and in international markets throughout Europe, Asia-Pacific, Latin America, Canada, and other regions.

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