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UPS upgraded to Buy at Deutsche Bank on productivity initiatives

Deutsche Bank analyst Amit Mehrotra upgraded UPS to Buy from Hold with a price target of $220, up from $197. While stating that its "easy to be neutral or negative on UPS in the current environment," Mehrotra argues that past experiences argues that times like this are "exactly" when to get more bullish. In the near-term, the analyst thinks market participants are "overly focused" on volume growth and not on mix and productivity initiatives that can drive positive revenue growth and solid contribution margins while over the mid-term he thinks upcoming teamsters contract negotiations will be "more benign than expected" and there is the potential for the negotiations to yield an opportunity for UPS to gain additional market share.

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