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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 $115.2 billion, UPS provides transportation and delivery, distribution, contract logistics, ocean freight, air freight, customs brokerage, and insurance services. The logistics giant is expected to release its Q3 earnings before the market opens on Thursday, Oct. 24.
Ahead of the event, analysts expect UPS to report a profit of $1.64 per share, up 4.5% from $1.57 per share reported in the year-ago quarter. The company has surpassed Wall Street’s adjusted EPS estimates in three of the past four quarters while missing on one other occasion. Its adjusted EPS for the last reported quarter declined by 29.5% year over year to $1.79, missing the consensus estimates by 9.6%.
For fiscal 2024, analysts expect UPS’ adjusted EPS to be $7.43, down 15.4% from $8.78 in fiscal 2023. However, in fiscal 2025, its adjusted EPS is expected to grow 18.8% year-over-year to $8.83.
UPS has declined 14.4% on a YTD basis, substantially underperforming the S&P 500 Index’s ($SPX) 21.9% gains and the Industrial Select Sector SPDR Fund’s (XLI) 21.4% returns during the same time frame.
UPS stock plummeted 12.1% after the release of its disappointing Q2 earnings on July 23. The company reported a 1.1% year-over-year decline in revenues to $21.8 billion, driven by a 2.6% decrease in revenue per piece because of changes in product mix in its U.S. Domestic segment and a 2.9% decrease in average daily volume in its International segment.
UPS reported a 3.1% surge in operating expenses to $19.9 billion. This led to a net margin contraction of 3% compared to the year-ago quarter to 6.5%, translating into a 32.3% decline in net income to $1.4 billion.
The consensus opinion on UPS stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 25 analysts covering the stock, 12 recommend a “Strong Buy,” 12 advise a “Hold,” and one suggests a “Strong Sell” rating.
The mean price target of $144.40 suggests a potential upside of 7.3% from current price levels.
On the date of publication, Aditya Sarawgi 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.
