United Parcel Service, Inc. plans to acquire electric vertical takeoff and landing aircraft from Beta Technologies as it looks to enhance its air delivery services in select markets across the US.
UPS (UPS) will be able to plan a “series of short routes, or one long route, on a single charge to meet customers’ needs.” The aircraft comes with a 250-mile range and a 1,400-pound cargo capacity ideally suited for time-sensitive deliveries. The aircraft will be of great benefit to healthcare providers as well as small and medium-sized businesses in need of time-sensitive packages.
The planned acquisition follows UPS’s subsidiary, UPS Flight Forward, securing the first US Federal Aviation Administration permit to operate a drone airline. The shipping company is already drawing in daily revenues from drone flights.
Juan Perez, Chief Information and Engineering Officer of UPS said, “These new aircraft will create operational efficiencies in our business, open possibilities for new services, and serve as a foundation for future solutions to reduce the emissions profile of our air and ground operation.”
After gaining more than 40% in 2020, UPS stock has continued its upward journey in 2021. (See United Parcel Service stock analysis on TipRanks)
Wells Fargo’s analyst, Allison Poliniak has a Buy rating on UPS. According to the analyst, UPS’ increased focus on international and SMB business will be key factors for the growth of the company.
The analyst also expects outsized growth opportunities in international segments to benefit UPS’s mix of business. The analyst has a $193 price target on UPS stock, implying 12.9% upside potential to current levels.
The consensus rating for UPS is a Buy based on 7 Buys, 2 Holds, and 1 Sell. The average analyst price target on the stock stands at $187.20, implying 9.4% upside potential to current levels.
UPS stock also scores a “Perfect 10” on TipRanks’ Smart Score rating system, which suggests that it is well-positioned to outperform the overall market.