UPS Declines More Sharply Than the Overall Market: Key Insights for Investors
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 25 2025
0mins
Should l Buy UPS?
Source: NASDAQ.COM
UPS Stock Performance: United Parcel Service (UPS) shares fell 1.57% to $82.58, underperforming against the S&P 500, which lost 0.5%. Over the past month, UPS has declined 4.51%, contrasting with the S&P 500's gain of 2.74%.
Earnings Expectations: Analysts anticipate UPS will report earnings of $1.33 per share, reflecting a 24.43% year-over-year decline, with projected revenue of $20.86 billion, a 6.23% decrease from the previous year. The full-year estimates suggest earnings of $6.5 per share and revenue of $87.5 billion, indicating significant declines.
Analyst Ratings and Valuation: UPS currently holds a Zacks Rank of #4 (Sell), with a recent downward revision of 0.41% in EPS estimates. Its Forward P/E ratio is 12.91, slightly below the industry average of 12.95, and it has a PEG ratio of 1.55, matching the industry average.
AI Investment Opportunities: The article highlights the potential for significant wealth creation in the next phase of AI development, suggesting that early investors in emerging companies could see substantial gains, while established AI stocks may experience a leveling off in growth.
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Analyst Views on UPS
Wall Street analysts forecast UPS stock price to fall
19 Analyst Rating
9 Buy
9 Hold
1 Sell
Moderate Buy
Current: 116.120
Low
80.00
Averages
107.06
High
126.00
Current: 116.120
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.
UPS's 2026 Strategic Outlook and Risks
- Profitability Enhancement Plan: UPS aims to increase the percentage of U.S. delivery volumes through automated facilities from 66.5% to 68% by 2026, which is expected to significantly reduce operational costs and enhance the company's competitiveness in small and medium-sized businesses and healthcare markets.
- Cash Flow Growth Expectations: UPS's free cash flow is projected to reach $6.5 billion in 2026, up from $5.5 billion in 2025, which management believes will provide ample funds to cover the $5.4 billion dividend while laying the groundwork for future profit growth.
- Capital Expenditure Adjustments: The company plans to reduce capital expenditures from $3.7 billion in 2025 to $3 billion in 2026, although maintaining such low spending during growth phases may prove challenging, necessitating careful evaluation of its sustainability.
- Risk Warnings: While UPS's operational plans are sensible and progress is evident, management's guidance may not fully account for potential risks surrounding operational execution, market conditions, and the ability to generate free cash flow to consistently cover dividends, warranting caution from investors.
See More
High-Yield Investment Opportunities: Pfizer and UPS
- Pfizer's Turnaround Potential: Pfizer currently offers a 6.2% dividend yield and has committed to maintaining this level, rapidly addressing a shortfall in the GLP-1 weight loss market through acquisitions and distribution partnerships, showcasing its strong capabilities in the pharmaceutical sector with future opportunities in oncology and migraines.
- UPS's Profitability Growth: UPS has a 5.5% dividend yield, and its stock price has recently risen due to early signs of a successful turnaround, with management focusing on high-margin businesses; despite a decline in U.S. volume, profitability per piece has improved, indicating successful strategic adjustments.
- Investor Confidence Rebound: As Pfizer and UPS improve their business operations, investor confidence in both companies is rising, particularly in a high-yield investment environment, making their dividends increasingly attractive and potentially highlighting them as future investment opportunities.
- Long-Term Outlook: UPS's guidance for 2026 suggests that its dividend is secure, and if the company can maintain current business trends, future earnings growth could make the dividend not only safe but also sustainable over the long term, appealing to investors seeking stable returns.
See More
The 'Boomcession' Phenomenon in the U.S. Economy
- Disconnect Between Data and Sentiment: Despite rising economic output and stock market gains, ordinary Americans are feeling increased financial pressure, as evidenced by credit card debt reaching a record $1.28 trillion in Q4 last year, indicating that economic prosperity is not benefiting the majority.
- Uneven Inflation Impact: According to Morgan Stanley, lower-income consumers faced significantly higher inflation rates for food and housing in 2024 compared to wealthier counterparts, exacerbating the gap between economic growth and consumer confidence and highlighting social inequality.
- 'Hiring Recession' in Job Market: While economic output per hour hit new highs, ordinary workers are anxious as the job market tightens, with December job openings falling to their lowest level since 2020, reflecting the disparity in economic benefits between high-income stockholders and the general workforce.
- Crisis of Trust in Economic Data: Surveys reveal that nearly 60% of Americans believe the economy is in recession, particularly among low-income households facing unstable financial situations, leading to a decline in trust in government economic data and highlighting the significant gap between economic prosperity and public sentiment.
See More
U.S. Economy Faces 'Boomcession' Phenomenon
- Disconnection Between Growth and Sentiment: Despite the U.S. economy showing strong performance with a GDP growth rate of 4.3%, nearly 60% of Americans believe the economy is in recession, highlighting a stark contrast between economic data and the lived experiences of ordinary citizens who feel excluded from the benefits of growth.
- Uneven Inflation Impact: According to Morgan Stanley, lower-income consumers faced significantly higher inflation rates for essentials like food and housing in 2024, exacerbating economic pressures and deepening social inequality, which in turn affects consumer confidence and spending.
- Tightening Job Market: While the stock market continues to rally, job openings fell to their lowest level since 2020 in December, leading economists to describe the situation as a 'hiring recession,' which increases anxiety among lower-income individuals who feel more vulnerable in this fragile recovery.
- Declining Consumer Confidence: Recent surveys indicate that 41% of individuals with low credit scores and 54% of low-income households view their financial situations as 'unstable,' underscoring the growing gap between economic data and public sentiment, which could negatively impact future consumer spending.
See More
Port of Los Angeles Cargo Volume Hits Three-Year Low
- Cargo Volume Decline: The Port of Los Angeles processed approximately 812,000 TEUs in January, reflecting a 12% year-over-year decline, indicating that unfulfilled commitments from the U.S.-China trade deal have severely impacted agricultural exports and overall port performance.
- Soybean Export Struggles: Exports of soybeans from the Port to China plummeted by 80% last year, and despite President Trump's announcement of potential additional purchases of 8 million metric tons, no improvements have been observed, highlighting the diminishing competitiveness of U.S. agricultural products in global markets.
- Falling Freight Rates: The decrease in container volumes has led to an 11.5% drop in ocean freight rates over the past month, with rates in the mid-low market segment falling by over 18%, prompting carriers to implement aggressive capacity management strategies, which may result in canceled sailings and further supply chain disruptions.
- Southeast Asia Import Growth: While imports from China have declined, containerized imports from Vietnam, Thailand, and Indonesia increased by 17.8%, 36.5%, and 18% respectively, indicating a diversification trend in U.S. import sources that partially offsets the decrease in Chinese imports.
See More
Overview of U.S. Markets Closure on Presidents' Day
- Market Closure: The New York Stock Exchange and Nasdaq are closed today in observance of Presidents' Day, with U.S. bond markets also fully shut down, indicating the holiday's direct impact on financial operations, with trading resuming on February 17.
- Banking Services: Most commercial banks, including JPMorgan Chase, Bank of America, and Capital One, are closed today following the Federal Reserve's holiday schedule, although online banking and ATM services remain operational, with transactions likely delayed until the next business day.
- Postal Service Suspension: The U.S. Postal Service has suspended regular mail delivery and closed all retail post office locations today, while private carriers continue to operate, highlighting the operational differences in public services during holidays.
- Retail Promotions: Many department stores are leveraging Presidents' Day for significant sales, particularly in furniture and appliances, aiming to attract consumers and boost sales, reflecting retailers' strategic approaches during holiday periods.
See More
UPS's 2026 Strategic Outlook and Risks
- Profitability Enhancement Plan: UPS aims to increase the percentage of U.S. delivery volumes through automated facilities from 66.5% to 68% by 2026, which is expected to significantly reduce operational costs and enhance the company's competitiveness in small and medium-sized businesses and healthcare markets.
- Cash Flow Growth Expectations: UPS's free cash flow is projected to reach $6.5 billion in 2026, up from $5.5 billion in 2025, which management believes will provide ample funds to cover the $5.4 billion dividend while laying the groundwork for future profit growth.
- Capital Expenditure Adjustments: The company plans to reduce capital expenditures from $3.7 billion in 2025 to $3 billion in 2026, although maintaining such low spending during growth phases may prove challenging, necessitating careful evaluation of its sustainability.
- Risk Warnings: While UPS's operational plans are sensible and progress is evident, management's guidance may not fully account for potential risks surrounding operational execution, market conditions, and the ability to generate free cash flow to consistently cover dividends, warranting caution from investors.
See More
High-Yield Investment Opportunities: Pfizer and UPS
- Pfizer's Turnaround Potential: Pfizer currently offers a 6.2% dividend yield and has committed to maintaining this level, rapidly addressing a shortfall in the GLP-1 weight loss market through acquisitions and distribution partnerships, showcasing its strong capabilities in the pharmaceutical sector with future opportunities in oncology and migraines.
- UPS's Profitability Growth: UPS has a 5.5% dividend yield, and its stock price has recently risen due to early signs of a successful turnaround, with management focusing on high-margin businesses; despite a decline in U.S. volume, profitability per piece has improved, indicating successful strategic adjustments.
- Investor Confidence Rebound: As Pfizer and UPS improve their business operations, investor confidence in both companies is rising, particularly in a high-yield investment environment, making their dividends increasingly attractive and potentially highlighting them as future investment opportunities.
- Long-Term Outlook: UPS's guidance for 2026 suggests that its dividend is secure, and if the company can maintain current business trends, future earnings growth could make the dividend not only safe but also sustainable over the long term, appealing to investors seeking stable returns.
See More
The 'Boomcession' Phenomenon in the U.S. Economy
- Disconnect Between Data and Sentiment: Despite rising economic output and stock market gains, ordinary Americans are feeling increased financial pressure, as evidenced by credit card debt reaching a record $1.28 trillion in Q4 last year, indicating that economic prosperity is not benefiting the majority.
- Uneven Inflation Impact: According to Morgan Stanley, lower-income consumers faced significantly higher inflation rates for food and housing in 2024 compared to wealthier counterparts, exacerbating the gap between economic growth and consumer confidence and highlighting social inequality.
- 'Hiring Recession' in Job Market: While economic output per hour hit new highs, ordinary workers are anxious as the job market tightens, with December job openings falling to their lowest level since 2020, reflecting the disparity in economic benefits between high-income stockholders and the general workforce.
- Crisis of Trust in Economic Data: Surveys reveal that nearly 60% of Americans believe the economy is in recession, particularly among low-income households facing unstable financial situations, leading to a decline in trust in government economic data and highlighting the significant gap between economic prosperity and public sentiment.
See More
U.S. Economy Faces 'Boomcession' Phenomenon
- Disconnection Between Growth and Sentiment: Despite the U.S. economy showing strong performance with a GDP growth rate of 4.3%, nearly 60% of Americans believe the economy is in recession, highlighting a stark contrast between economic data and the lived experiences of ordinary citizens who feel excluded from the benefits of growth.
- Uneven Inflation Impact: According to Morgan Stanley, lower-income consumers faced significantly higher inflation rates for essentials like food and housing in 2024, exacerbating economic pressures and deepening social inequality, which in turn affects consumer confidence and spending.
- Tightening Job Market: While the stock market continues to rally, job openings fell to their lowest level since 2020 in December, leading economists to describe the situation as a 'hiring recession,' which increases anxiety among lower-income individuals who feel more vulnerable in this fragile recovery.
- Declining Consumer Confidence: Recent surveys indicate that 41% of individuals with low credit scores and 54% of low-income households view their financial situations as 'unstable,' underscoring the growing gap between economic data and public sentiment, which could negatively impact future consumer spending.
See More
Port of Los Angeles Cargo Volume Hits Three-Year Low
- Cargo Volume Decline: The Port of Los Angeles processed approximately 812,000 TEUs in January, reflecting a 12% year-over-year decline, indicating that unfulfilled commitments from the U.S.-China trade deal have severely impacted agricultural exports and overall port performance.
- Soybean Export Struggles: Exports of soybeans from the Port to China plummeted by 80% last year, and despite President Trump's announcement of potential additional purchases of 8 million metric tons, no improvements have been observed, highlighting the diminishing competitiveness of U.S. agricultural products in global markets.
- Falling Freight Rates: The decrease in container volumes has led to an 11.5% drop in ocean freight rates over the past month, with rates in the mid-low market segment falling by over 18%, prompting carriers to implement aggressive capacity management strategies, which may result in canceled sailings and further supply chain disruptions.
- Southeast Asia Import Growth: While imports from China have declined, containerized imports from Vietnam, Thailand, and Indonesia increased by 17.8%, 36.5%, and 18% respectively, indicating a diversification trend in U.S. import sources that partially offsets the decrease in Chinese imports.
See More
Overview of U.S. Markets Closure on Presidents' Day
- Market Closure: The New York Stock Exchange and Nasdaq are closed today in observance of Presidents' Day, with U.S. bond markets also fully shut down, indicating the holiday's direct impact on financial operations, with trading resuming on February 17.
- Banking Services: Most commercial banks, including JPMorgan Chase, Bank of America, and Capital One, are closed today following the Federal Reserve's holiday schedule, although online banking and ATM services remain operational, with transactions likely delayed until the next business day.
- Postal Service Suspension: The U.S. Postal Service has suspended regular mail delivery and closed all retail post office locations today, while private carriers continue to operate, highlighting the operational differences in public services during holidays.
- Retail Promotions: Many department stores are leveraging Presidents' Day for significant sales, particularly in furniture and appliances, aiming to attract consumers and boost sales, reflecting retailers' strategic approaches during holiday periods.
See More
