CA - United Parcel Service: Logistics Leader Still In The Bargain Bin

2024-04-25 08:30:00 ET

Summary

• UPS posted Q1 earnings that fell by 35%. However, it's likely anticipated.
• Despite challenges, UPS is confident in its ability to turn things around in the second half of the year.
• UPS has several growth drivers to bolster its recovery.
• Wall Street is still pessimistic over UPS's 3Y outlook, as near-term risks could persist.
• UPS's attractive valuation and pessimism suggest buyers are likely early in its recovery thesis, potentially improving their risk/reward.

UPS Still Facing Rates Headwinds

Since my last UPS article in early February , United Parcel Service ( UPS ) investors have slightly outperformed the S&P 500 ( SPX ) ( SPY ) on a total returns basis. I had anticipated UPS's headwinds to peter out in the second half as it continues its recovery. UPS's first-quarter earnings release corroborated my conviction in its bullish thesis, as the Carol Tome-led company outperformed analysts' estimates. While UPS experienced soft demand hurting its key business segments in its Q1 earnings, United Parcel Service reaffirmed its full-year 2024 guidance....

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