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UPS Financial Overview
UPS (NYSE: UPS) has seen a stock decline of 40% over the past five years, resulting in a negative total return of 28% even with reinvested dividends. As of now, it trades at $87, with a forward dividend yield of 7.6%.
Recent Performance Metrics
UPS faced challenges in 2022 and 2023, including a dip in average daily package volumes and increased labor and fuel costs. In particular, the average daily package volume was 22.29 million in 2023, down from 25.25 million in 2021. Total revenue in 2023 was $90.96 billion, a decrease from $97.29 billion in 2021. Analysts expect revenue and EPS to decline further by 4% and 7%, respectively, in 2025.
Operational Changes and Future Outlook
In a strategic shift, UPS aims to reduce its relationship with Amazon, its largest customer, by at least 50% by mid-2026. Additionally, it has increased prices and closed distribution centers to enhance margins. UPS’s average revenue per piece grew to $14.28 in 2025 despite a 2% revenue dip. Future growth appears uncertain, with modest gains anticipated in 2026 and 2027.
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