United Parcel (UPS – Research Report), the Industrials sector company, was revisited by a Wall Street analyst yesterday. Analyst Fadi Chamoun from BMO Capital maintained a Buy rating on the stock and has a $125.00 price target.
Fadi Chamoun has given his Buy rating due to a combination of factors that highlight United Parcel Service’s strategic initiatives and financial performance. Despite a challenging macroeconomic environment, UPS’s Q1/25 results slightly exceeded expectations, driven by strong performance in the US Domestic segment. The company’s focus on reducing costs and reallocating capital towards higher-margin supply chain solutions, such as healthcare, is expected to mitigate macroeconomic headwinds and improve overall profitability.
Furthermore, UPS is undergoing a major reconfiguration of its network, aiming to cut costs significantly by 2025 and 2026. This restructuring is anticipated to enhance the volume mix and support operating margins in the US Domestic segment. While short-term pressures exist, the strategic shift away from lower-margin B2C volumes towards higher-value-added products is projected to be beneficial for UPS’s margins and return on invested capital in the long run. These strategic steps, along with targeted cost savings, underpin Chamoun’s confidence in UPS’s future performance, despite a slight reduction in the target price.
According to TipRanks, Chamoun is a 5-star analyst with an average return of 11.6% and a 58.51% success rate. Chamoun covers the Industrials sector, focusing on stocks such as Saia, CAE, and TFI International.
In another report released today, Stifel Nicolaus also maintained a Buy rating on the stock with a $124.00 price target.