When package delivery titan UPS (NYSE:UPS) signed a deal with the Teamsters union that kept packages flowing and money coming in, some thought that that would be an end to UPS’ troubles, at least for a while. Well, UPS was down fractionally in Wednesday afternoon’s trading, and it’s largely because of that deal with the Teamsters. Or, rather, analysts’ reaction to that deal.
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The latest troubles for UPS started when UBS downgraded UPS from Buy to “neutral.” While it was certainly glad to see package volume coming back, UPS’s ability to improve on its margins is now substantially lower. UBS analyst Thomas Wadewitz noted that all the extra costs UPS incurred in getting the Teamsters back to work is going to hurt, especially when coupled with the decline in domestic package volume as inflation and a declining economy cause shoppers to pull in their wallets. UBS wasn’t alone there; Loop Capital analysts also brought UPS stock down to a Hold.
However, one concern UPS no longer has is filling any holes in its workforce. New reports from Indeed, an online job listings board, noted that searches for open positions with either “UPS” or “United Parcel Service” jumped 50% just a week after the deal was announced. There are no concomitant searches for “delivery driver”, meanwhile, which suggests that the key distinguishing feature there is working for UPS.
While the news is certainly hitting UPS, the broader analyst consensus still holds. UPS stock is considered a Moderate Buy thanks to six Buy ratings, nine Hold and one Sell. Further, UPS stock offers investors a scant 1.5% upside potential thanks to its average price target of $183.08.
