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Valued at $110.3 billion by market cap, United Parcel Service, Inc. (UPS) is a leading global provider of package delivery and logistics services. The Atlanta, Georgia-based company offers a broad range of services, including domestic and international shipping, freight forwarding, and supply chain solutions across various sectors.
Companies valued at $10 billion or more are generally considered “large-cap” stocks and United Parcel Service fits this criterion perfectly. UPS is renowned for its extensive global logistics network, offering unmatched ground shipping services and innovative last-mile delivery solutions, making it the world's largest courier company by revenue.
Despite that, the logistics giant is down 22.4% from its 52-week high of $164.25, hit in September last year. The company’s shares are down 7.4% over the past three months, underperforming the broader ProShares Supply Chain Logistics ETF's (SUPL) 1.2% dip over the same time frame.
Longer term, UPS has experienced a nearly 19% decline on a YTD basis, compared to the SUPL's marginal dip. Also, shares of United Parcel Service have declined 22.3% over the past 52 weeks versus SUPL's 2.3% return over the same time frame.
UPS has been trading below its 200-day and 50-day moving averages since last year despite some fluctuations, indicating a bearish price trend.
UPS has underperformed due to lower package volumes and modest pricing declines, influenced by a soft demand environment. Moreover, the stock failed to deliver on Jul. 23 due to higher-than-expected expenses linked to the new labor deal with the Teamsters Union and a one-time regulatory charge, resulting in Q2 earnings of $1.79 per share and sales of $21.8 billion, both below estimates. Despite seeing U.S. volume growth for the first time in nine quarters, these increased costs, coupled with softer shipping demand, led the company to lower its full-year revenue forecast and contributed to a 12.1% decline in its stock.
In comparison, its rival, FedEx Corporation (FDX), has risen 12.8% on a YTD basis and 11.2% over the past 52 weeks, outperforming UPS in both periods.
Despite UPS’ relative underperformance, analysts are cautiously optimistic about the stock's prospects. The stock has a consensus rating of “Moderate Buy” from the 23 analysts covering it, and the stock is currently trading below the mean price target of $143.96.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
