UPS Cuts Amazon Business by 50%: Implications for Future Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 23 2026
0mins
Should l Buy UPS?
Source: Fool
- Business Reduction Context: UPS announced it will cut its business with Amazon by over 50% in the latter half of this year, resulting in an estimated $5 billion revenue loss, which represents about 6% of UPS's total revenue last year.
- Job Cuts Impact: To address the business reduction, UPS plans to cut 30,000 jobs this year, following the elimination of 48,000 jobs last year, demonstrating the company's commitment to optimizing operations and reducing costs.
- Profit Margin Improvement Potential: Despite the reduction in Amazon business, UPS has the opportunity to enhance overall profitability by focusing on higher-margin shipping operations, with the CEO stating that 2026 will be a pivotal year for executing their growth strategy.
- Long-Term Growth Outlook: While UPS may face challenges in growth in the short term, improving profit margins could lead to better profitability in the future, making the stock a potential buy-and-hold option for investors looking at long-term gains.
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Analyst Views on UPS
Wall Street analysts forecast UPS stock price to rise
19 Analyst Rating
9 Buy
9 Hold
1 Sell
Moderate Buy
Current: 94.800
Low
80.00
Averages
107.06
High
126.00
Current: 94.800
Low
80.00
Averages
107.06
High
126.00
About UPS
United Parcel Service, Inc. provides a range of integrated logistics solutions for customers in more than 200 countries and territories. Its U.S. Domestic Package segment offers a range of United States domestic air and ground package transportation services. Its air portfolio offers time-definite, same-day, next-day, two-day and three-day delivery alternatives as well as air cargo services. Its ground network enables customers to ship using its day-definite ground service. UPS SurePost provides residential ground service for customers with non-urgent, lightweight residential shipments. Its International Package segment consists of small package operations in Europe, Indian sub-continent, Middle East and Africa, Canada and Latin America and Asia. It offers a selection of guaranteed day- and time-definite international shipping services. Its supply chain solutions consist of forwarding, logistics, customized third-party logistics and specialized cold chain transportation solutions.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Technological Integration Advantage: By combining MSI's advanced engineering, diagnostics, and analytical expertise with UPS's field services and maintenance capabilities, UPS is positioned to deliver a more comprehensive end-to-end solution, bridging the traditional gap between engineering analysis and operational execution.
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- Improving Earnings Outlook: UPS demonstrates management capability in a challenging environment, with current valuations not fully reflecting its improving earnings outlook, suggesting significant enhancement in profitability if operational performance continues to improve.
- Investor Focus Misalignment: Investors are overly focused on near-term weakness while neglecting UPS's long-term earnings power, indicating a lack of awareness of its future growth potential, which could result in missed investment opportunities.
- High-Quality Logistics Leader: UPS is viewed as a high-quality, attractively valued logistics leader, and despite facing challenges in growth and profitability momentum, its strong income quality and investment metrics continue to support its long-term investment value.
See More
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- Evergy's Growth Potential: Evergy serves 1.7 million customers and expects its adjusted earnings per share to grow by over 8% annually by 2028, primarily driven by AI-related demand, while offering a strong dividend yield of 3.4%, indicating robust shareholder returns.
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- UPS's Transformation Potential: United Parcel Service (UPS), a global logistics leader delivering an average of 20.8 million packages daily, faces recent stock price pressures due to conflicts but anticipates 2026 as a pivotal year for restructuring to enhance profitability through higher-margin shipments, promising substantial returns for investors over the next decade.
- Economic Uncertainty Impact: As inflation and economic uncertainty rise, investors are rotating out of expensive growth stocks into companies with durable moats, which is likely to favor stocks with stable cash flows and strong dividend records, reflecting a significant shift in investment strategy.
See More
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- Military Deployment Escalation: The Pentagon is reportedly preparing for weeks of ground operations in Iran, with thousands of American soldiers and Marines arriving in the Middle East, raising concerns about an escalation in the Iran conflict that could disrupt global supply chains and increase prices.
- Rising Oil Price Pressure: Oil prices are climbing again as the conflict intensifies, particularly after Yemen's Iran-backed Houthis fired missiles at Israel, heightening fears over energy supply disruptions that could impact the global economy.
- Shipping Route Risks: The Strait of Hormuz, a vital shipping route, is being impeded by the ongoing war, with industry leaders warning that if it does not reopen by mid-April, supply disruptions could worsen significantly, affecting operations across various sectors.
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