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With a market cap of $99.8 billion, United Parcel Service, Inc. (UPS) is the world's largest express carrier and package delivery company, specializing in transportation and logistics services worldwide. Headquartered in Atlanta, Georgia, UPS operates through two main segments: U.S. Domestic Package and International Package, offering time-definite air and ground delivery services.
Companies valued at $10 billion or more are generally described as “large-cap” stocks, and United Parcel Service fits right into that category. UPS manages a vast ground fleet, including package cars, vans, tractors, and motorcycles, ensuring the efficient movement of millions of shipments daily. In addition to package delivery, it provides freight forwarding, customs brokerage, healthcare logistics, and e-commerce solutions.
However, the package delivery service has fallen 26.5% from its 52-week high of $158.95, recorded in March 2024. UPS shares have declined 8.1% over the past three months, underperforming the broader Nasdaq Composite's ($NASX) 7.4% drop during the same period.
In the long term, UPS stock has dipped 7% on a YTD basis, lagging behind NASX's 5.3% decrease over the same period. Also, United Parcel Service has dropped 21.7% over the past 52 weeks, compared to NASX's 12.8% gain.
UPS has remained mostly below its 50-day and 200-day moving averages since last year.
Despite reporting better-than-expected Q4 2024 adjusted EPS of $2.75, UPS stock plunged 14.1% on Jan. 30 after the company issued a weak 2025 revenue forecast of $89 billion, far below the Wall Street consensus. The decline was further exacerbated by UPS' announcement of a major volume reduction agreement with Amazon, its largest customer, cutting Amazon-related shipments by over 50% by 2026.
Additionally, revenue for Q4 2024 came in slightly below estimates at $25.3 billion, while the Supply Chain Solutions Segment saw a 9.1% revenue drop due to the sale of Coyote Logistics, raising concerns.
In contrast, rival FedEx Corporation (FDX) has outperformed UPS over the past 52 weeks, rising marginally. Nevertheless, FedEx shares have declined 11.1% on a YTD basis, lagging behind United Parcel.
Despite UPS' weak performance, analysts remain moderately optimistic about its prospects. Among the 26 analysts covering the stock, there is a consensus rating of “Moderate Buy,” and it is currently trading below the mean price target of $134.28.
