UPS price target raised to $198 from $196 at UBS

UBS analyst Thomas Wadewitz raised the firm’s price target on UPS to $198 from $196 and keeps a Buy rating on the shares. UPS’s Q1 earnings showed rising cyclical pressures reflected in a negative volume progression in the quarter where volumes were -3%, -5%, and -7% y/y in January, February and March, respectively, the analyst tells investors in a research note. UBS believes the sharp decline in the stock was due to expectations of a potential upside Q1 and also because of concerns about about margin performance against a weaker parcel market backdrop, but feels the greater concern is likely the expiration of UPS’s current contract with the Teamsters on July 31 and risk regarding a potential labor disruption.