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 strategy and $50,000-$100,000 available for investment. The company's strong dividend yield, recent financial performance, and positive long-term outlook outweigh short-term margin pressures. The technical indicators and hedge fund buying activity further support the decision.
The stock shows bullish momentum with SMA_5 > SMA_20 > SMA_200. MACD is positive at 0.555, indicating upward momentum, while RSI at 69.009 is neutral. Key support and resistance levels are S1: 108.901, Pivot: 115.074, and R1: 121.247. The stock is trading near resistance but remains in an upward trend.
Hedge funds are significantly increasing their positions in UPS, with a 3861.21% increase in buying over the last quarter.
Analysts have raised price targets, with most firms maintaining Buy or Outperform ratings.
The company reported strong Q4 2025 earnings, with net income and EPS growth.
UPS offers a high dividend yield of 5.6%, making it attractive for long-term investors.
Near-term margin pressures due to lower Amazon volumes, Ground Saver shifts to USPS, and higher aircraft lease costs.
Revenue declined by -3.25% YoY in Q4 2025, reflecting some operational challenges.
Limited visibility into B2B demand improvement in the short term.
In Q4 2025, UPS reported revenue of $24.479 billion (-3.25% YoY), net income of $1.791 billion (+4.07% YoY), and EPS of $2.1 (+4.48% YoY). Gross margin improved to 79.68% (+2.99% YoY), indicating better operational efficiency despite revenue decline.
Analysts have raised price targets, with most firms maintaining Buy or Outperform ratings. Bernstein raised the target to $128, UBS to $125, and Stifel to $116, citing strong Q4 results and expected margin improvements in the latter half of 2026. However, some firms like JPMorgan and BMO Capital remain cautious due to short-term uncertainties.
