UPS Declines More Sharply Than the Overall Market: Key Insights for Investors
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 25 2025
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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.
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Analyst Views on UPS
Wall Street analysts forecast UPS stock price to rise 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: 103.700
Low
80.00
Averages
107.06
High
126.00
Current: 103.700
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 Reports Strong Q4 Earnings, Raises 2026 Revenue Forecast
- Earnings Beat: UPS reported Q4 2025 revenue of $24.5 billion and adjusted EPS of $2.38, surpassing the $2.20 estimate, indicating robust market performance.
- 2026 Outlook: The company forecasts 2026 revenue of approximately $89.7 billion, exceeding the $87.938 billion analyst estimate, with a non-GAAP adjusted operating margin of about 9.6%, highlighting future growth potential.
- Cost-Cutting Strategy: UPS cut $3.5 billion in costs in 2025 and plans an additional $3 billion in savings for 2026, including 30,000 job cuts and 24 facility closures to address Amazon volume losses and external challenges.
- Capex Adjustment: UPS aims to reduce 2026 capital expenditures to $3 billion from $3.7 billion in 2025, primarily by converting 15 B767 aircraft purchases to leases, saving $1.5 billion in cash flow.
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UPS Automates to Tackle Competitive Challenges
- Network Reduction Strategy: UPS is downsizing its U.S. facility network to address the decline in Amazon package volume, which, while hurting revenue in the short term, allows for significant cost savings by eliminating high maintenance expenses associated with older facilities.
- Automation Deployment Impact: To date, UPS has implemented various automated systems across 127 facilities, with 57% of packages processed through automated facilities in 2023, a figure expected to rise to 68% by the end of 2026, significantly lowering per-package handling costs.
- Layoff Plans: UPS plans to cut 48,000 positions in 2025 and another 30,000 in 2026, primarily through attrition and a voluntary separation program for full-time drivers, aligning workforce size with increased operational efficiency from automation.
- Long-Term Growth Outlook: Although UPS's revenue is declining due to the reduction of low-margin packages, the automation strategy is expected to lower costs, with analysts projecting adjusted earnings per share of $7.12 by 2026, indicating potential for future growth and margin expansion.
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