United Parcel Service (NYSE: UPS) , well known for its brown-clad delivery crew, has seen its stock price advance by around 20% over the past three months. That's more than triple the gain of the S&P 500 index over the same span. There were good reasons for that short-term outperformance, but there's also a big-picture problem that investors still need to consider.
As this year got underway, investors' fears that an economic downturn was in the cards intensified. Traders responded by selling off a wide range of stocks, leading to a bear market. UPS fell largely in sync with the S&P 500, at one point dropping by more than 25% from its 2022 peak.
However, its second-quarter results were pretty solid. Revenue was up 5.7% year over year, adjusted earnings per share rose 7.5%, and management reaffirmed its full-year guidance. It also highlighted plans to increase its stock buyback target for the year. These were all positives, and traders jumped back into the stock.
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Proceed With Caution When Considering This Ultra-Popular Delivery Stock