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United Parcel Service (UPS) Gains But Lags Market: What You Should Know

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In the latest trading session, United Parcel Service (UPS) closed at $205.77, marking a +1% move from the previous day. The stock lagged the S&P 500's daily gain of 1.64%. At the same time, the Dow added 1.08%, and the tech-heavy Nasdaq gained 0.45%.

Coming into today, shares of the package delivery service had lost 3.84% in the past month. In that same time, the Transportation sector lost 6.01%, while the S&P 500 lost 0.83%.

United Parcel Service will be looking to display strength as it nears its next earnings release. In that report, analysts expect United Parcel Service to post earnings of $3.05 per share. This would mark year-over-year growth of 14.66%. Our most recent consensus estimate is calling for quarterly revenue of $26.97 billion, up 8.35% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.58 per share and revenue of $96.42 billion. These totals would mark changes of +40.7% and +13.93%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for United Parcel Service. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.02% lower within the past month. United Parcel Service is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that United Parcel Service has a Forward P/E ratio of 17.6 right now. This valuation marks a premium compared to its industry's average Forward P/E of 16.59.

Meanwhile, UPS's PEG ratio is currently 1.45. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Transportation - Air Freight and Cargo was holding an average PEG ratio of 1.45 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 46, putting it in the top 19% 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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