UPS Set to Announce Q4 Earnings Amidst Market Concerns
United Parcel Service, Inc. (UPS), a leader in global logistics and package delivery services, is poised to disclose its fourth-quarter earnings on Tuesday, Feb. 4. The company, headquartered in Atlanta, Georgia, boasts a market cap of $105.2 billion and serves customers in over 220 countries and territories.
Analysts’ Projections Show Slight Profit Increase
In anticipation of the earnings report, analysts predict UPS will generate a profit of $2.52 per share, representing a 2% increase from $2.47 in the same quarter last year. Notably, UPS has exceeded Wall Street’s earnings per share (EPS) estimates in three of the past four quarters, with one miss. Last quarter, UPS reported adjusted earnings of $1.76 per share, outperforming consensus estimates by 6.7%. This performance was bolstered by recovering U.S. volumes, effective cost management, and new business from USPS air cargo.
Looking Ahead: Earnings Outlook for 2024 and 2025
For fiscal 2024, analysts predict UPS will report EPS of $7.49, a decline of 14.7% from $8.78 in fiscal 2023. However, forecasts suggest a recovery in fiscal 2025, with an anticipated 16.7% year-over-year growth, bringing EPS to $8.74.
Stock Performance: UPS vs. Market
UPS shares have plummeted by 23.5% over the past year, contrasting with a 21.8% gain in the S&P 500 Index ($SPX) and a 16.9% return from the Industrial Select Sector SPDR Fund (XLI) during the same timeframe.
Challenges and Strategic Investments
The company faces challenges from rising transportation costs and increased competition from e-commerce giants like Amazon. To address these issues, UPS is investing in technology and infrastructure to improve efficiency and competitiveness. A noteworthy event occurred on Oct. 24, when UPS shares rose over 5% after a Q3 earnings report that showcased a 5.6% year-over-year revenue growth, reaching $22.2 billion. Furthermore, UPS adjusted its 2024 outlook, now forecasting $91.1 billion in revenue with a projected 9.6% non-GAAP adjusted operating margin, which reflects Q3 performance and the recent Coyote Logistics divestiture.
Analyst Ratings Point to Cautious Optimism
The consensus on UPS stock is moderately bullish, leading to an overall “Moderate Buy” rating. Out of 26 analysts covering the stock, 16 recommend a “Strong Buy,” eight advise a “Hold,” and two suggest a “Strong Sell.” The average analyst price target for UPS stands at $148.03, which indicates a 20.1% potential upside from current levels.
On the date of publication, Rashmi Kumari did not have any positions in the securities mentioned in this article. All information and data presented are strictly for informational purposes. For more details, please view the Barchart Disclosure Policy here.
The views expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
