United Parcel Service (UPS) saw its shares close at $96.97 in the latest trading session, indicating a positive movement of 1.49% from the previous day. This gain outperformed the broader S&P 500 index, which experienced a slight decline of 0.09%. In contrast, the Dow Jones Industrial Average fell by 0.38%, while the tech-focused Nasdaq managed a modest rise of 0.13%.
Over the past month, UPS’s stock has increased by 2.68%, although this growth lags behind the Transportation sector’s gain of 5.11% and exceeds the S&P 500’s increase of 1.89%. The upcoming earnings report is set to be a focal point for both analysts and investors, with expectations of an earnings per share (EPS) of $2.18. This figure represents a considerable year-over-year decline of 20.73%. Additionally, revenue is projected at $23.88 billion, indicating a 5.6% decrease compared to the previous year.
Looking at the fiscal year as a whole, Zacks Consensus Estimates forecast earnings of $6.89 per share and revenues of $87.95 billion, marking a decline of 10.75% and 3.43%, respectively, from the prior year.
Analysts have been updating their estimates for UPS, which can signal changing market conditions. Positive revisions in these estimates are seen as a favorable indicator for the company’s future performance. Research indicates that adjustments in earnings estimates are often closely linked to fluctuations in stock prices. The Zacks Rank model, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has a track record of successful predictions, with #1 ranked stocks achieving an average annual return of 25% since 1988. Recently, the Zacks Consensus EPS estimate for UPS has climbed 0.93%, and the stock currently holds a Zacks Rank of #3 (Hold).
On the valuation front, UPS has a Forward P/E ratio of 13.87, which is lower than the industry average of 15.37. Furthermore, the company reports a PEG ratio of 2.28, which, while slightly above the industry average PEG ratio of 2.17, takes into account expected earnings growth and is often utilized for comparative valuation.
Overall, UPS remains a key player in the transportation industry, with potential for recovery as it navigates through these challenging financial metrics.