UPS Should I Buy
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United Parcel Service Inc (UPS) is a good buy for a beginner investor with a long-term horizon and $50,000-$100,000 available for investment. Despite short-term headwinds, the company's strong infrastructure, improving margins in H2 2026, and favorable analyst sentiment make it a compelling long-term investment opportunity.
The stock is currently oversold with an RSI of 12.695, indicating potential for a rebound. However, the MACD is negatively expanding (-1.906), suggesting bearish momentum. The stock is trading near its key support level (S1: 102.792), which could provide a buying opportunity for long-term investors.
Analysts have raised price targets, with Jefferies setting a target of $135 and maintaining a Buy rating.
Hedge funds are significantly increasing their positions in UPS, with a 3861.21% increase in buying over the last quarter.
The company's Q4 2025 financials showed improved net income (+4.07% YoY) and EPS (+4.48% YoY), along with a higher gross margin (+2.99% YoY).
Short-term headwinds include lower Amazon volumes, Ground Saver shifts to USPS, and higher aircraft lease costs.
The MACD indicates bearish momentum, and the stock is trading below its pivot level (109.484).
Revenue declined by 3.25% YoY in Q4 2025, reflecting challenges in the current business environment.
In Q4 2025, UPS reported a revenue decline of 3.25% YoY to $24.48 billion. However, net income increased by 4.07% YoY to $1.79 billion, and EPS rose by 4.48% YoY to $2.10. Gross margin also improved to 79.68%, up 2.99% YoY, indicating better cost management.
Analysts are generally positive on UPS, with multiple firms raising price targets recently. Jefferies raised its target to $135, citing the company's strong infrastructure and low obsolescence. UBS, Bernstein, and Stifel also maintain Buy ratings with price targets ranging from $125 to $135. However, some analysts like JPMorgan and BMO Capital remain cautious due to near-term margin pressures and limited visibility into B2B demand improvement.
