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United Parcel Service (UPS) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

United Parcel Service (UPS) closed the most recent trading day at $118.37, moving +1.75% from the previous trading session. This move outpaced the S&P 500's daily gain of 1.27%. At the same time, the Dow added 1.25%, and the tech-heavy Nasdaq gained 1.48%.

Coming into today, shares of the package delivery service had lost 2.63% in the past month. In that same time, the Transportation sector lost 7.41%, while the S&P 500 lost 4.37%.

Wall Street will be looking for positivity from UPS as it approaches its next earnings report date. The company is expected to report EPS of $2.05, up 12.64% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $18.34 billion, up 5.12% from the prior-year quarter.

UPS's full-year Zacks Consensus Estimates are calling for earnings of $7.50 per share and revenue of $74.30 billion. These results would represent year-over-year changes of +3.59% and +3.4%, respectively.

Investors might also notice recent changes to analyst estimates for UPS. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for 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 has moved 0.11% higher within the past month. UPS is currently a Zacks Rank #3 (Hold).

Investors should also note UPS's current valuation metrics, including its Forward P/E ratio of 15.51. This valuation marks a premium compared to its industry's average Forward P/E of 9.9.

Also, we should mention that UPS has a PEG ratio of 1.77. 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 1.3 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 208, putting it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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