Zacks Raises UPS FY2025 Earnings Estimate Amid Stock Analyst Activity

Analysts at Zacks Research have revised their earnings per share (EPS) estimates for United Parcel Service, Inc. (NYSE: UPS) for the fiscal year 2025, indicating a positive outlook for the transportation giant. In a report released on November 10, 2023, Zacks boosted its EPS forecast from $6.30 to $6.99. This adjustment comes as the company’s consensus estimate for current full-year earnings stands at $7.95 per share.

In addition to the FY2025 estimates, Zacks Research has provided projections for UPS’s upcoming earnings. The firm anticipates Q4 2025 earnings to reach $2.21 per share, Q2 2027 earnings at $1.43 per share, and FY2027 earnings at $7.72 per share. This optimistic outlook reflects a growing confidence in UPS’s financial performance.

Several other brokerages have also weighed in on UPS recently. On October 29, 2023, Stephens upgraded UPS to a “hold” rating, while Susquehanna raised its price target from $100.00 to $105.00 and issued a “neutral” rating. UBS Group increased its target price from $110.00 to $113.00 and maintained a “buy” rating. Conversely, Morgan Stanley lowered its price target from $80.00 to $75.00 and set an “underweight” rating.

A snapshot of the current investment landscape reveals a mixed sentiment towards UPS stock. One analyst rated the stock as a Strong Buy, nine analysts issued Buy ratings, sixteen gave it a Hold rating, and four analysts rated it as a Sell. According to MarketBeat, the stock currently holds a consensus rating of “Hold” and a target price of $110.00.

Recent Stock Performance and Quarterly Earnings

As of November 10, 2023, United Parcel Service shares opened at $96.00. The stock has a 50-day moving average price of $87.69 and a 200-day moving average price of $92.92. With a market capitalization of $81.36 billion, the company boasts a price-to-earnings (P/E) ratio of 14.84 and a price-to-earnings-growth (PEG) ratio of 2.29. It also has a debt-to-equity ratio of 1.50, a current ratio of 1.30, and a quick ratio of 1.32. Over the past year, UPS has seen a low of $82.00 and a high of $138.67.

United Parcel Service reported its quarterly earnings on October 28, 2023, revealing an EPS of $1.74, exceeding analysts’ expectations of $1.31 by $0.43. The company’s revenue for the quarter reached $21.42 billion, surpassing estimates of $20.94 billion. Although the revenue marked a decline of 3.7% from the same period last year, UPS maintained a robust return on equity of 40.07% and a net margin of 6.15%.

Dividend Announcement and Insider Activity

In addition to the positive earnings report, UPS announced a quarterly dividend of $1.64 per share, which will be paid on December 4, 2023. Shareholders of record on November 17, 2023, will receive this dividend, translating to an annualized dividend of $6.56 and a yield of 6.8%. The ex-dividend date for this payment is also set for November 17, 2023. Notably, the company’s dividend payout ratio currently stands at 101.39%.

Recent insider transactions indicate growing confidence among company executives. Director Christiana Smith Shi purchased 500 shares of UPS on August 22, 2023, at an average price of $88.17 per share, totaling approximately $44,085. This acquisition increased her holdings in the company, reflecting a significant investment in UPS’s future.

Institutional Investor Trends

UPS’s stock has drawn the attention of institutional investors, with several large firms adjusting their stakes recently. Vanguard Group Inc. increased its holdings by 0.6% during the third quarter, now owning 67,277,988 shares valued at approximately $5.62 billion. State Street Corp raised its stake by 1.5%, acquiring an additional 444,384 shares and bringing its total to 30,774,530 shares worth about $3.11 billion. Charles Schwab Investment Management and Geode Capital Management also boosted their stakes, reflecting a broader interest in UPS among institutional investors.

Currently, institutional investors and hedge funds collectively own 60.26% of UPS’s stock, highlighting the company’s significant presence in the investment community.

As United Parcel Service navigates the complexities of the transportation sector, these developments offer insights into its current financial health and future prospects. With rising EPS estimates and a solid dividend announcement, UPS appears to be well-positioned for ongoing investor interest.