An analyst at Susquehanna, Bascome Majors, has adjusted the price target for United Parcel Service (UPS, Financial), reducing it from $120 to $110 while maintaining a Neutral stance on the stock. Despite UPS reporting first-quarter adjusted earnings that surpassed market expectations, the analyst suggests that the company's outlook for the second quarter seems fairly grounded. However, there is some caution regarding the company's performance in the latter half of the year, with concerns about increasing cost management not necessarily leading to a significant seasonal boost.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 28 analysts, the average target price for United Parcel Service Inc (UPS, Financial) is $116.79 with a high estimate of $145.00 and a low estimate of $80.00. The average target implies an upside of 20.74% from the current price of $96.73. More detailed estimate data can be found on the United Parcel Service Inc (UPS) Forecast page.
Based on the consensus recommendation from 32 brokerage firms, United Parcel Service Inc's (UPS, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for United Parcel Service Inc (UPS, Financial) in one year is $151.41, suggesting a upside of 56.53% from the current price of $96.73. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the United Parcel Service Inc (UPS) Summary page.
UPS Key Business Developments
Release Date: April 29, 2025
- Consolidated Revenue: $21.5 billion, a decrease of 0.7% year-over-year.
- Consolidated Operating Profit: $1.8 billion, an increase of 0.9% year-over-year.
- Consolidated Operating Margin: 8.2%, up 20 basis points from the previous year.
- Diluted Earnings Per Share (EPS): $1.49, up 4.2% year-over-year.
- US Domestic Segment Operating Profit: Increased by $164 million year-over-year.
- US Domestic Operating Margin: Increased by 110 basis points.
- International Segment Revenue: $4.4 billion, up 2.7% year-over-year.
- International Average Daily Volume (ADV): Increased 7.1% year-over-year.
- Supply Chain Solutions Revenue: $2.7 billion, with a decrease of $471 million due to divestiture.
- Free Cash Flow: $1.5 billion for the first quarter.
- Share Repurchases: $1 billion completed, meeting the annual target.
- Dividend Payments: $1.3 billion paid to shareholders.
- Amazon Volume Decline: ADV down 16% year-over-year in the first quarter.
- Building Closures: 73 buildings to be closed by the end of June as part of network reconfiguration.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- United Parcel Service Inc (UPS, Financial) reported a consolidated operating profit increase of 0.9% year-over-year, reaching $1.8 billion.
- The US Domestic segment saw a significant increase in operating profit by $164 million year-over-year, with operating margins expanding by 110 basis points.
- UPS successfully insourced SurePost's final mile delivery, replacing it with the new Ground Saver product, which offers operational flexibility.
- The company is executing a major network reconfiguration, including 164 operational closures, to optimize capacity and increase productivity.
- UPS's strategic acquisition of Andlauer Healthcare Group aims to bolster its healthcare capabilities in Canada, supporting its goal to become the leading complex healthcare logistics provider globally.
Negative Points
- Consolidated revenue for the first quarter of 2025 decreased by 0.7% compared to the previous year, totaling $21.5 billion.
- The decline in US average daily volume (ADV) for February and March was higher than expected due to uncertainties in global trade policies and muted demand.
- International operating profit decreased by 4.1% year-over-year, impacted by a mixed shift to more economy services in Europe and lower demand-related surcharges.
- Supply Chain Solutions segment experienced a revenue decline of $471 million, primarily due to the divestiture of Coyote in 2024.
- The macroeconomic environment remains highly uncertain, with potential impacts from changing trade policies and tariffs, leading UPS to withhold updates to its full-year outlook.
