Logistics leader United Parcel Service (UPS) is preparing to announce its Q2 earnings this week, prompting investors to consider the timing of their UPS stock purchases. Wall Street anticipates UPS will report earnings of $1.56 per share, indicating a significant year-over-year decline of 12.9%, while revenues are expected to total $20.85 billion, reflecting a 4.4% drop compared to the same quarter last year.
In its previous quarter, UPS exceeded analysts’ revenue expectations, achieving $21.55 billion—remaining flat year over year—while operating profits saw a modest increase of 3.3%, reaching $1.7 billion. Adjusted earnings per share also surpassed the previous year’s figures, climbing to $1.49 from $1.43.
The company’s largest division, U.S. Domestic, experienced revenue growth due to solid performance in air cargo, even as overall package volumes fell. However, challenges persist in the international segment, which has seen profits decline due to rising costs and increased competition.
As the company looks to tackle its financial hurdles, UPS has made the unusual decision to offer buyouts to its U.S.-based delivery drivers for the first time in its history. This move aligns with plans to reduce its workforce by 20,000 roles and to close 73 facilities as part of a major restructuring effort aimed at cutting costs.
Despite pressures from geopolitical issues, tariffs, and inflation, there is potential upside for UPS in the form of decreasing fuel costs and improving tariff stability, which could benefit the company moving forward.
Currently, UPS holds a Moderate Buy consensus rating on TipRanks, based on 10 Buy, 9 Hold, and 1 Sell ratings. The stock’s highest price target is set at $133, while the average consensus price target suggests an 8.86% upside to approximately $112.74.
Investors may view the upcoming earnings report as a turning point for UPS, as the company navigates its significant restructuring while trying to stabilize its service offerings and return to growth.