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Atlanta-based United Parcel Service, Inc. (UPS) is the world's largest express carrier and package delivery company. With a market cap of $109.9 billion, UPS provides transportation and delivery, distribution, contract logistics, ocean freight, air freight, customs brokerage, and insurance services.
Companies worth $10 billion or more are generally described as "large-cap stocks," United Parcel Service fits this bill perfectly. Given the company’s dominance in the freight & logistics industry, its valuation above this mark is not surprising. UPS operates in more than 200 countries and territories and employs over 500,000 people across the globe.
Despite its strengths, the stock has dropped 22.1% from its 52-week high of $163.82 achieved on Dec. 18, 2023. UPS has observed marginal gains over the past three months underperforming the S&P 500 Index’s ($SPX) 10.4% gains during the same time frame.
Over the longer term, UPS’ performance looks even more grim, as the stock plummeted 18.9% on a YTD basis and 17.2% over the past 52 weeks, substantially lagging behind SPX’s 27.4% gains in 2024 and 33% returns over the past year.
To confirm the bearish trend and recent consolidation, UPS has mostly traded below its 200-day moving average over the past year and above its 50-day moving average since late September with notable fluctuations.
However, UPS stock prices surged 5.3% after the release of its impressive Q3 earnings on Oct. 24. After a challenging 18-month period, the company returned to revenue and profit growth. It took a number of organic and inorganic steps to support its strategic execution. Driven by growth in volumes, UPS reported a 5.6% year-over-year growth in revenues, reaching $22.2 billion. The company showcased disciplined expense management which led to a robust 11.7% year-over-year growth in adjusted net income, totaling $1.5 billion. Moreover, its adjusted EPS of $1.76 surpassed analysts’ estimates by a notable 6.7%.
The company expects to continue this momentum into Q4, due to anticipated volume growth and focus on revenue quality in global small package operations the company is ready to deliver another successful holiday season.
UPS has lagged behind its competitor FedEx Corporation’s (FDX) 10.5% gains on a YTD basis and 5% returns over the past year.
Nevertheless, UPS has a consensus “Moderate Buy” rating among the 26 analysts covering the stock. Its mean price target of $148.38 suggests a 16.3% upside potential from current price levels.
