UPS Reports Q4 Earnings with Positive Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3d ago
0mins
Should l Buy UPS?
Source: seekingalpha
UPS shares rose 3.00% as the stock reached a 20-day high.
The company reported Q4 2025 earnings, with total revenue of $24.5 billion, exceeding analyst expectations of $24 billion despite a 3.2% year-over-year decline. The adjusted EPS of $2.38 also surpassed expectations of $2.20, indicating resilience amid challenges. Furthermore, UPS forecasts 2026 revenue of $89.7 billion, exceeding the $88 billion estimate, and plans to maintain its quarterly cash dividend of $1.64, which bolsters investor confidence.
This positive earnings report and optimistic guidance suggest a potential turnaround for UPS, attracting investor interest and contributing to the stock's upward movement.
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Analyst Views on UPS
Wall Street analysts forecast UPS stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for UPS is 107.06 USD with a low forecast of 80.00 USD and a high forecast of 126.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
19 Analyst Rating
9 Buy
9 Hold
1 Sell
Moderate Buy
Current: 116.550
Low
80.00
Averages
107.06
High
126.00
Current: 116.550
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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- Profitability Improvement: The adjusted earnings per share of $2.38 surpassed Wall Street's forecast of $2.20, indicating positive progress in enhancing margins, which may attract more investor interest moving forward.
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- REIT Stability: Realty Income, the world's sixth-largest REIT, owns over 15,500 properties with top tenants like Dollar General and FedEx, boasting a forward dividend yield of 5.1%, and its impressive track record of 30 consecutive years of dividend increases underscores its stability and growth potential.
- Delivery Giant Resilience: United Parcel Service has never cut its dividend since going public in 1999, currently offering a 5.6% dividend yield, with projected free cash flow of $6.5 billion in 2023, sufficient to cover $5.4 billion in dividends, highlighting its strong financial health and growth prospects.
- Telecom Growth Potential: Verizon Communications offers a 6.1% dividend yield and has increased its dividend for 19 consecutive years, with free cash flow expected to rise to $21.5 billion in 2026, indicating robust growth following its acquisition of Frontier Communications, which strengthens its market position.
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See More
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- Surge in Layoff Plans: January 2026 saw the highest layoff plans since 2009, indicating a severe job market situation that could lead to further economic deterioration, impacting consumer confidence and spending.
- Weak Job Additions: The private sector added only 22,000 jobs, significantly lower than the 140,000 added during the same period last year, suggesting a sluggish economic recovery that may lead to decreased household income and consumer spending.
- Increase in Unemployment Claims: Initial claims for unemployment benefits unexpectedly rose to 231,000 in the last week of January, reflecting the impact of severe winter weather on the job market, potentially exacerbating economic uncertainty.
- Disconnection Between Growth and Employment: Despite GDP growth reaching an annual rate of 4.4% in Q3 last year, challenges remain for low-income households, highlighting a “K-shaped” recovery that may exacerbate social inequality.
See More
Trump's Fed Chair Nominee to Resign from UPS Board if Confirmed
- Director Resignation Announcement: Kevin Warsh, nominated by Trump for the Federal Reserve chair, will resign from his position on UPS's board if confirmed by the Senate, indicating his commitment to the new role.
- No Disagreement in Resignation: UPS's SEC filing clarifies that Warsh's resignation is not due to any disagreements regarding the company's operations, policies, or practices, reflecting a positive relationship with UPS.
- Market Reaction Monitoring: Warsh's resignation could impact shareholder confidence in UPS, although there are currently no indications that this move will directly affect the company's operations.
- Future Outlook: As Warsh is poised to potentially lead the Federal Reserve, the market will closely watch his influence on monetary policy, with UPS, as a major corporation, likely to experience indirect effects from policy changes.
See More
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- Market Sentiment Shift: As fears grow that artificial intelligence could disrupt demand rather than enhance it, software and AI-exposed stocks have faced significant sell-offs at the start of 2023, particularly in February, leading investors to reassess their risk exposure.
- Capital Flow Changes: Goldman Sachs equity strategist Ben Snider indicates that capital is rotating towards sectors perceived as insulated from AI disruption, marking a clear departure from last year's market strategies and reflecting diminished investor confidence in AI themes.
- Cyclical Industry Rally: Despite software stocks experiencing one of their worst weeks since the 2022 rate-hike panic, cyclical and consumer-linked industries have continued their recent rallies, indicating a growing preference for traditional sectors among investors.
- Strong Dow Jones Performance: Amid the decline in software stocks, the Dow Jones Industrial Average has rallied towards all-time highs, suggesting increased investor confidence in industries tied to physical assets and cyclical activity, further emphasizing the market's demand for safety from AI-driven productivity risks.
See More
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- Layoff Surge: U.S. companies announced plans to cut 108,435 jobs in January, a 205% increase from the previous month and the highest in 17 years, indicating significant labor market weakness that may prompt the Fed to consider rate cuts to support the economy.
- Economic Slowdown Signals: While official data suggests a resilient labor market, private reports are raising early warning flags, indicating weakening growth and disinflation that could lead the Federal Reserve to ease policy.
- Bitcoin Price Movement: Bitcoin surged 6%, bouncing from support levels of $60,000-$62,000, but faces critical resistance at $75,000-$80,000, which, if broken, could restore market confidence.
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See More
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- Earnings Beat Expectations: UPS reported its Q4 2025 results with revenue of $24.5 billion, exceeding analyst expectations of $24 billion, demonstrating resilience amid economic slowdowns and potentially laying the groundwork for future growth.
- Profitability Improvement: The adjusted earnings per share of $2.38 surpassed Wall Street's forecast of $2.20, indicating positive progress in enhancing margins, which may attract more investor interest moving forward.
- Reducing Amazon Deliveries: UPS is cutting back on deliveries for Amazon, a move that may be controversial but is aimed at strengthening margins, aligning with CEO Carol Tome's strategic goals to enhance long-term competitiveness.
- Stock Price Recovery: As of early 2026, UPS shares have risen 17%, with a more than 37% increase over the past six months, significantly enhancing the stock's investment appeal driven by profitability and sustainable growth, while trading at a reasonable 15 times estimated future earnings, indicating further upside potential.
See More
