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United Parcel Service (UPS) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

United Parcel Service (UPS) closed the most recent trading day at $117.95, moving -1.95% from the previous trading session. This change lagged the S&P 500's daily loss of 0.04%. At the same time, the Dow lost 0.1%, and the tech-heavy Nasdaq gained 0.05%.

Coming into today, shares of the package delivery service had lost 0.21% in the past month. In that same time, the Transportation sector gained 0.69%, while the S&P 500 gained 2.48%.

UPS will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.10, up 8.25% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $20.50 billion, up 3.29% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.51 per share and revenue of $74.07 billion. These totals would mark changes of +3.73% and +3.07%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for UPS. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. UPS is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note UPS's current valuation metrics, including its Forward P/E ratio of 16.01. For comparison, its industry has an average Forward P/E of 13.64, which means UPS is trading at a premium to the group.

It is also worth noting that UPS currently has a PEG ratio of 1.83. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Transportation - Air Freight and Cargo was holding an average PEG ratio of 1.49 at yesterday's closing price.

The Transportation - Air Freight and Cargo industry is part of the Transportation sector. This group has a Zacks Industry Rank of 182, putting it in the bottom 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow UPS in the coming trading sessions, be sure to utilize Zacks.com.

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