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United Parcel Service, Inc. (UPS) is a global leader in the logistic industry, offering express carrier and package delivery services with a market cap of $117.6 billion. Headquartered in Atlanta, Georgia, the company offers various specialized transportation and logistics solutions, including freight forwarding, customs brokerage, fulfillment, returns, financial transactions, and repairs.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and United Parcel fits right into that category. Its market cap surpasses this threshold, reflecting its substantial size, stability, and influence in the logistics sector. Besides, the company has a strong global presence in over 220 countries, a trusted brand image, and a diverse portfolio of services, including package delivery, freight transportation, and supply chain solutions. The company has also made significant investments in technology to enhance its operations and customer experience.
Despite its strengths, United Parcel Service is currently sailing through choppy waters. The stock is down 28.4% from its 52-week high of $192.98, achieved on July 28. Moreover, shares of United Parcel Service are down 12.2% over the past three months, underperforming the S&P 500 Industrial Sector SPDR’s (XLI) marginal gains over the same time frame.
Moreover, in the longer term, UPS stock has tumbled 12.1% on a YTD basis and fell 19.4% over the past 52 weeks, significantly underperforming XLI’s 7.8% returns in 2024 and 19.2% gains over the past year.
To confirm the bearish price trend, UPS has consistently traded below its 200-day and 50-day moving averages since mid-August, despite some fluctuations.
UPS faced a challenging start to 2024, with large corporate customers reducing their supply chain expenses amid economic uncertainty. Alongside lower delivery volumes, United Parcel navigated a lengthy labor contract negotiation with the Teamsters Union last year, which nearly resulted in a nationwide strike and caused some customers to switch to alternative logistics providers.
To emphasize the stock’s underperformance over the longer term, it is worth noting that UPS stock has been lagging behind its competitor FedEx Corporation (FDX). FDX stock has gained 12.7% over the past 52 weeks and is marginally up on a YTD basis, sharply contrasting with UPS’ dips over the same time frame.
Despite the grim price action, analysts remain moderately bullish on the stock's outlook. Among the 22 analysts covering the stock, the consensus rating is a “Moderate Buy.” Also, its current mean price target of $157.90 suggests a potential upside of 15%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
