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United Parcel Service, Inc. (UPS) is a global logistics and package delivery service leader. With a market cap of $105.2 billion, it is dedicated to providing innovative and efficient supply chain solutions, connecting businesses and consumers across more than 220 countries and territories. The Atlanta, Georgia-based company is set to release its fourth-quarter earnings on Tuesday, Feb. 4.
Ahead of the event, analysts expect UPS to report a profit of $2.52 per share, up 2% from $2.47 in the year-ago quarter. The company has surpassed Wall Street’s EPS estimates in three of the last four quarters while missing on another occasion. Its adjusted earnings of $1.76 per share for the last quarter surpassed the consensus estimate by 6.7%. UPS' Q3 beat was driven by rebounding U.S. volumes, cost controls, and new USPS air cargo business.
For fiscal 2024, analysts expect UPS to report EPS of $7.49, down 14.7% from $8.78 in fiscal 2023. However, the company is expected to rebound in fiscal 2025 with a 16.7% year-over-year growth, reaching an EPS of $8.74.
United Parcel's shares have dropped 23.5% over the past 52 weeks, underperforming the S&P 500 Index's ($SPX) 21.8% gain and the Industrial Select Sector SPDR Fund's (XLI) 16.9% return in the same period.
UPS has lagged behind the broader market and peers, pressured by concerns over rising transportation costs and growing competition from e-commerce giants like Amazon.
However, the company’s strategic investments in technology and infrastructure aim to boost efficiency and competitiveness. On Oct. 24, UPS shares jumped over 5% following a Q3 earnings report that exceeded expectations. Consolidated revenues rose 5.6% year-over-year to $22.2 billion. Additionally, UPS revised its 2024 outlook, projecting $91.1 billion in revenue and a 9.6% non-GAAP adjusted operating margin, incorporating Q3 performance and the Coyote Logistics divestiture.
The consensus opinion on UPS stock is moderately bullish, with an overall “Moderate Buy” rating. Of 26 analysts covering the stock, 16 advise a “Strong Buy” rating, eight suggest a “Hold,” and two suggest a “Strong Sell.” UPS' average analyst price target is $148.03, indicating a 20.1% potential upside from the current price levels.
