UPS Cuts Amazon Business by 50%, Faces Revenue Loss
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Should l Buy UPS?
Source: NASDAQ.COM
UPS's stock fell 3.01% as it hit a 20-day low amid broader market declines.
The company 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. To address this reduction, UPS plans to cut 30,000 jobs this year, following the elimination of 48,000 jobs last year. Despite these challenges, UPS aims to enhance profitability by focusing on higher-margin shipping operations, with the CEO stating that 2026 will be a pivotal year for executing their growth strategy.
While UPS may face short-term challenges due to the significant reduction in business with Amazon, the focus on improving profit margins could lead to better long-term profitability, making the stock a potential buy-and-hold option for investors.
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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: 97.500
Low
80.00
Averages
107.06
High
126.00
Current: 97.500
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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