United Parcel (UPS) AI Stock Analysis

• Market Cap: $81.75B
• Dividend Yield: 6.77%
• Average Volume (3M): 7.10M
• Price to Earnings (P/E): 14.1
• Beta (1Y): 0.79
• Revenue Growth: 1.36%
• EPS Growth: -0.76%
• Country: US
• Employees: 254,360
• Sector: Industrials
• Sector Strength: 79
• Industry: Integrated Freight & Logistics
• EPS (TTM): 6.86
• Shares Outstanding: 733,686,700
• 10 Day Avg. Volume: 6,674,816
• 30 Day Avg. Volume: 7,101,777
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.40
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 6.97
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $112.65
• Price Target Upside: 16.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 21

UPS's overall stock score reflects its strong financial fundamentals and attractive valuation, which are somewhat offset by bearish technical indicators and mixed earnings call sentiment. The company is well-positioned with effective cost management and strategic initiatives, but faces challenges such as stagnant revenue growth and external uncertainties that require careful monitoring.

Positive Factors

Cost Reduction

Cost savings are expected to accelerate, with significant savings projected from the Amazon glide down and facility closures.

Earnings

UPS posted adjusted EPS of $1.49, which was above both the analyst estimate and the consensus estimate.

Strategic Positioning

The company is well positioned to benefit from global supply chain shocks due to its integrated global logistics network.

Negative Factors

Guidance

The 2Q guidance from UPS is below expectations, with a decline in U.S. Domestic margin and a significant reduction in demand in the China-to-U.S. trade lane.

Tariff Impact

Tariff headwinds are weighing on the outlook for United Parcel Service, overshadowing other positive factors.

Volume Decline

The decline in volumes from Amazon and the impact of US tariffs have been underestimated, contributing to a downgrade in stock rating.

United Parcel Business Overview & Revenue Model

Company Description

United Parcel Service, Inc. provides letter and package delivery, transportation, logistics, and related services. It operates through two segments, U.S. Domestic Package and International Package. The U.S. Domestic Package segment offers time-definite delivery of letters, documents, small packages, and palletized freight through air and ground services in the United States. The International Package segment provides guaranteed day and time-definite international shipping services in Europe, the Asia Pacific, Canada and Latin America, the Indian sub-continent, the Middle East, and Africa. This segment offers guaranteed time-definite express options. The company also provides international air and ocean freight forwarding, customs brokerage, distribution and post-sales, and mail and consulting services in approximately 200 countries and territories. In addition, it offers truckload brokerage services; supply chain solutions to the healthcare and life sciences industry; shipping, visibility, and billing technologies; and financial and insurance services. The company operates a fleet of approximately 121,000 package cars, vans, tractors, and motorcycles; and owns 59,000 containers that are used to transport cargo in its aircraft. United Parcel Service, Inc. was founded in 1907 and is headquartered in Atlanta, Georgia.

How the Company Makes Money

UPS makes money primarily through its extensive logistics and package delivery networks. The company's revenue model is centered around its three main business segments: U.S. Domestic Package, International Package, and Supply Chain & Freight. The U.S. Domestic Package segment generates revenue by delivering packages within the United States, leveraging a vast network of distribution centers and transportation assets. The International Package segment focuses on deliveries outside the U.S., capitalizing on global trade and the demand for cross-border shipping. The Supply Chain & Freight segment provides logistics and freight services, including transportation, distribution, and freight forwarding, catering to businesses' supply chain needs. Significant partnerships with large e-commerce companies, retailers, and businesses that require reliable shipping and logistics solutions also contribute to UPS's earnings. Additionally, the company benefits from advancements in technology and infrastructure investments that enhance operational efficiency and customer service.

United Parcel Financial Statement Overview

Summary

UPS demonstrates strong financial health, with solid profitability and efficient cash flow management. The company maintains healthy margins and effective cost control, although revenue growth is stagnant. The balance sheet shows moderate leverage, which is manageable but requires monitoring.

Income Statement

UPS has shown strong profitability with a consistent EBIT and EBITDA margin. The TTM gross profit margin is healthy at approximately 19%, and the net profit margin is around 6.45%, indicating efficient cost management. However, the revenue growth has been relatively flat, with a slight decline in the TTM compared to the previous reporting period. The company has maintained robust operational margins, which suggests operational efficiency despite revenue stagnation.

Balance Sheet

The company's balance sheet demonstrates moderate leverage with a debt-to-equity ratio around 1.63, indicating reliance on debt but within industry norms. Return on equity stands at around 37.4% TTM, reflecting strong earnings relative to equity. However, the equity ratio is approximately 22.9%, showing limited equity financing, which could be a potential risk if liabilities increase.

Cash Flow

UPS exhibits strong cash flow management, with a solid operating cash flow to net income ratio over 1.5, indicating efficient cash generation from operations. The free cash flow growth rate has been positive, showcasing effective capital expenditure control and cash flow generation. The free cash flow to net income ratio is substantial, highlighting strong cash conversion efficiency. These factors contribute to a favorable cash flow position.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
91.07B	90.96B	100.34B	97.29B	84.63B
	Gross Profit
16.36B	17.23B	13.09B	12.81B	7.81B
	EBIT
8.47B	9.14B	13.09B	17.27B	2.64B
	EBITDA
11.91B	12.71B	17.00B	15.82B	10.37B
	Net Income Common Stockholders
5.78B	6.71B	11.55B	12.89B	1.34B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.32B	6.07B	7.59B	10.59B	6.32B
	Total Assets
70.07B	70.86B	71.12B	69.41B	62.49B
	Total Debt
25.65B	26.73B	23.52B	25.53B	27.75B
	Net Debt
19.54B	23.52B	17.92B	15.27B	21.84B
	Total Liabilities
53.33B	53.54B	51.32B	55.14B	61.74B
	Stockholders Equity
16.72B	17.31B	19.79B	14.25B	741.00M
Cash Flow		Free Cash Flow
6.21B	5.08B	9.34B	10.81B	5.05B
	Operating Cash Flow
10.12B	10.24B	14.10B	15.01B	10.46B
	Investing Cash Flow
-217.00M	-7.13B	-7.47B	-3.82B	-5.28B
	Financing Cash Flow
-6.85B	-5.53B	-11.19B	-6.82B	-4.52B

United Parcel Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 96.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UPS, the sentiment is Negative. The current price of 96.4 is below the 20-day moving average (MA) of 96.58, below the 50-day MA of 107.81, and below the 200-day MA of 121.45, indicating a bearish trend. The MACD of -3.23 indicates Negative momentum. The RSI at 40.44 is Neutral, neither overbought nor oversold. The STOCH value of 27.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for UPS.

United Parcel Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZTO	78 Outperform	$14.94B	12.77	14.46%	3.58%	12.67%	-0.32%
UPS	71 Outperform	$81.75B	14.06	35.96%	6.77%	1.36%	-0.76%
EXPD	71 Outperform	$15.51B	19.70	35.12%	1.30%	13.98%	14.29%
FDX	71 Outperform	$52.64B	13.80	14.74%	2.51%	0.34%	-8.45%
CHRW	70 Outperform	$10.74B	23.54	32.11%	2.72%	-0.22%	65.52%
JBHT	64 Neutral	$13.29B	23.92	13.97%	1.29%	-3.82%	-12.80%
Sector *	64 Neutral	$4.28B	11.80	5.33%	250.46%	4.10%	-9.26%

United Parcel Corporate Events

UPS Appoints Kevin P. Clark to Board of Directors

On March 3, 2025, UPS announced the appointment of Kevin P. Clark, Chairman and CEO of Aptiv PLC, to its Board of Directors, increasing the board size to thirteen members. Clark’s expertise in finance, technology, and industrial transformation is expected to enhance UPS’s strategic areas, particularly in healthcare and technology, as he joins the Audit Committee following the 2025 Annual Meeting of Shareowners.