UPS (NYSE: UPS) reported its Q3 results last week, with revenues missing but earnings beating the street estimates, and we believe that UPS stock has room for growth, as discussed below. The company reported revenue of $21.1 billion and adjusted earnings of $1.57 per share compared to the consensus estimates of $21.5 billion and $1.52, respectively. In this note, we discuss UPS’ stock performance, key takeaways from its recent results, and valuation.
UPS stock has seen a decline of 20% from levels of $170 in early January 2021 to around $140 now, vs. an increase of about 15% for the S&P 500 over this roughly 3-year period. However, the decrease in UPS stock has been far from consistent. Returns for the stock were 27% in 2021, -19% in 2022, and -18% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 13% in 2023 – indicating that UPS underperformed the S&P in 2023.
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