Key Points
United Parcel Service (UPS) has seen its shares decline by over 50% since their peak in 2022, largely due to a fallout with Amazon, which previously comprised 20% to 25% of UPS’s package volume. UPS is restructuring by reducing its Amazon delivery volume by 1 million packages per day in 2025, with a similar reduction expected by mid-2026. Despite these challenges, UPS management anticipates that overall volumes will increase in the latter half of 2026, leading to flat full-year revenue compared to the previous year.
Wall Street analysts predict earnings per share will grow by nearly 9% annually over the next three to five years. Currently, UPS shares are trading at less than 14 times their forward earnings estimate and offer a dividend yield of 6.75%. However, the sustainability of this dividend is in question as UPS pays out most of its earnings for this purpose.
