Recommended as Stock of the Week on February 16, 2026

United Parcel Service - When the largest customer becomes a competitor

TickerUPS.NYSE
Recommended Price119.24 USD
Current Price 119.24 USD
United Parcel Service Inc – stock chart

Scores at time of recommendation (February 16, 2026)

Leeway Score
65/100
Excellent
Business Rating
40/100
Fair
Market-Fit Rating
75/100
Excellent
Cycle Rating
81/100
Excellent

More about our scores in Help

5-year stock timeline

Latest price (2026-05-28): 104.47

Major events

Carol Tomé became CEO on June 1, 2020—the first external hire and first woman to lead UPS—and immediately shifted strategy toward profitability and margin discipline.

The pandemic e-commerce surge of 2020–2021 handed UPS record volumes and unexpectedly wide margins. The company raised rates, added surcharges, and deliberately moved upmarket into higher-margin small business. Results in 2021 were strong enough that management guided to 2023 revenue targets a year early.

Labor negotiations with the Teamsters stretched through mid-2023. A tentative agreement arrived in July, ratified widely by August, and forced UPS to recast 2023 revenue and margin assumptions to account for wage increases and agreement costs.

Through 2024–2025, UPS reported volume recovery and updated guidance reflecting package-mix normalization, easing margin pressure in some quarters, and continued investment in productivity and capacity.

Investor perception

From 2020–2021, the narrative pivoted from pandemic operator to profit-first logistics player. Management deliberately shed low-margin volume and implemented pricing discipline. Investors stopped watching pure growth and started watching margin quality.

In 2022 and into mid-2023, the mood turned cautious. E-commerce tailwinds moderated, volumes normalized, and margins compressed. The story became one of cyclicality and operational risk.

When labor talks intensified in mid-2023, the narrative briefly shifted to structural cost—higher wages, strike risk—but the August ratification closed that chapter. Attention swung back to execution, cost control, and capacity deployment through 2024–2025.

Technical chart phases

The March 2020 selloff reversed into a sustained uptrend through late 2021 as e-commerce and pricing power lifted both revenue and margins.

From 2022 into mid-2023, the stock consolidated and pulled back as volume normalization and margin pressure reset expectations. Volatility spiked during the Teamsters negotiations when guidance was repriced.

Late 2023 through 2025 saw recovery and range expansion. The labor deal removed immediate strike risk. Margins and volumes showed improvement in pockets. Large single-quarter moves tied to earnings and guidance updates became the norm. The current price reflects the market's assessment of those operational and labor outcomes.

Key Points

From recommendation (February 16, 2026)

  • Strategic withdrawal from low-margin Amazon volumes with simultaneous focus on more profitable top 100 customers
  • Massive restructuring with 34,000 job cuts and 93 facility closures by Q3 2025 already saves 2.2 billion USD
  • Automation level of 66% of volume in Q4 2025 after installation of new systems in 35 facilities
  • Teamsters lawsuit against Driver Choice Program and planned 30,000 further job cuts in 2026 creates legal and operational uncertainty
  • Ten-fold increase in customs declarations after abolition of the de minimis exception opens up new business area

Investment Thesis

From recommendation (February 16, 2026)

UPS is in the midst of the biggest transformation in its history: out of low-margin Amazon volumes and into automation and more profitable customer segments. The calculation could work out - 2.2 billion dollars in cost savings show that management is serious. But the road is rocky: an aggressive union is suing the company over the Driver Choice Program and is threatening to block a further 30,000 job cuts. At the same time, Amazon is expanding its own logistics and turning from a major customer into a competitor. The share is trading at a P/E ratio of 18.3 with a solid dividend - anyone who buys UPS is betting that the efficiency gains will come faster than the regulatory and competitive brakes take effect.

Key risks and downside factors

UPS operates in a global parcel, freight and logistics market alongside meaningful public competitors including FedEx, Deutsche Post DHL Group, Amazon Logistics, XPO and C.H. Robinson.[1][16][14][21][18] A secondary tier of regional, tech-enabled carriers—OnTrac, LaserShip, Veho among them—continues to grow and increasingly captures volume during peak periods, either supplementing or displacing traditional incumbents.[10][8][6] The company faces structural headwinds: customers building their own logistics capabilities, rising labor costs colliding with tight capacity, the operational drag of international customs and regulatory frameworks, and persistent margin pressure from competitive intensity.[2][10][1][21]

  • Customer insourcing—Amazon Logistics in particular—is pulling parcel volumes and shifting the revenue mix away.
  • Peak-period capacity constraints and rising driver labor costs are pressuring operating expenses while creating service disruption risk.
  • Cross-border regulatory hurdles, customs backlogs, and trade friction are disrupting international express and freight flows.[1][9]
  • Pricing and margin pressure from integrated 3PLs, freight forwarders, and tech-enabled last-mile competitors like XPO, C.H. Robinson, and Veho.[21][18][8]

Competitive landscape

UPS operates in a tight global parcel and logistics market alongside formidable competitors—FedEx, Deutsche Post (DHL), Amazon, and XPO Logistics—where the real battles are fought over scale, pricing power, last-mile delivery, and integrated e-commerce fulfillment [4][3][6][13]. This competitive intensity squeezes margins and demands relentless capital deployment just to stay competitive [4][6]. Layer in operational complexity, labor negotiations, fuel volatility, and the shifting maze of cross-border regulations, and you get a business where earnings and cash flow can swing harder than the headline numbers suggest [3][4].

CompanyTicker
FedEx CorporationFDX.NYSE
Amazon.com, Inc.AMZN.NASDAQ
XPO Logistics, Inc.XPO.NYSE

Private competitors

  • OnTrac
  • LaserShip

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Catalysts

From recommendation (February 16, 2026)

  • Smooth reduction of Amazon volumes by mid-2026 without margin pressure
  • Court decision or settlement in Teamsters proceedings that does not block restructuring
  • Further automation successes and visible margin improvement in H2 2026
  • Additional growth in customs clearance business after de minimis abolition

Analysis

From recommendation (February 16, 2026)

UPS has a globally integrated logistics network built up over decades with enormous economies of scale that is practically impossible to replicate - it would take hundreds of billions of dollars and years to create a comparable infrastructure. Package deliveries are absolutely essential due to the growth of e-commerce, and UPS is one of the largest providers of critical supply chain infrastructure in the world. However, the company shares this advantage with FedEx and DHL, while Amazon is slowly but steadily penetrating the market with its financial strength and technological know-how. In addition, UPS operates in a highly regulated environment: the recent wage negotiations with the Teamsters union led to significant cost increases, and the current lawsuit could delay or increase the cost of the planned restructuring. Stricter environmental regulations could force further investment in the vehicle fleet. After all, high regulatory barriers to entry also act as a protective barrier against new competitors, and the size of UPS enables it to cope with regulatory requirements better than smaller competitors. The question remains: Will the efficiency offensive come quickly enough before the legal and competitive risks take full effect?

Performance Figures of United Parcel Service Inc

in USD

1M High / Low
109.84 / 93.86
52W High / Low
122.41 / 82.00
5Y High / Low
233.72 / 82.00
1M
+2.20%
3M
-8.39%
6M
+12.45%
1Y
+15.42%
3Y
-28.20%
5Y
-38.98%

Relative Performance vs Benchmarks

PeriodUnited Parcel Service Inc vs DAX vs S&P 500 (SPY)
1M +2.20% -2.51% -3.25%
3M -8.39% -7.85% -18.09%
6M +12.45% +6.95% +2.01%
1Y +15.42% +10.80% -13.73%
3Y -28.20% -85.84% -113.87%
5Y -38.98% -101.02% -130.28%

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Historical valuation trends

How the company’s key valuation ratios (P/E, P/S, P/B and P/CF) have evolved over time compared to today.

PeriodP/E RatioP/S RatioP/B RatioP/CF Ratio
Current16.91.05.610.6
1Y ago14.20.95.39.1
3Y ago13.81.57.412.4
5Y ago35.52.126.115.0

Frequently Asked Questions

From recommendation (February 16, 2026)

Is United Parcel Service Inc a good investment?

United Parcel Service Inc has a Leeway Score of 65.5/100, which is rated as Excellent. The Leeway Score combines business quality, fundamental evaluation, and valuation cycle into a comprehensive assessment. A higher score indicates stronger investment quality based on AI-powered fundamental analysis.

What does United Parcel Service Inc do?

United Parcel Service Inc is a company characterized by the following investment thesis: United Parcel Service, Inc., a package delivery and logistics provider, offers transportation and delivery services. It operates through two segments, U.S. Domestic Package and International Package. The U.S. Domestic Package segment offers time-definite delivery services for express letters, documents, packages and palletized freight through air and ground services. The International Package segment provides small package operations in Europe, the Middle East and Africa, Canada and Latin America, and Asia. The company offers a range of guaranteed day- and time-definite international transportation services; day-definite services; cross-border ground package delivery; contract-only, e-commerce solutions for non-urgent, and cross-border shipments; and international service for urgent and palletized shipments. It also provides international air and ocean freight forwarding, contract logistics, customs brokerage and insurance, mail services, healthcare logistics, distribution, and post-sales services. United Parcel Service, Inc. was founded in 1907 and is headquartered in Atlanta, Georgia. United Parcel Service Inc operates in the Industrials / Integrated Freight & Logistics industry is based in USA employs around 460,000 people. United Parcel Service Inc recently reported revenue of about 88.32B USD, a profit margin of 5.94%, return on equity of 33.35%, a market capitalisation around 86.68B USD, valuation multiples of roughly 16.5x earnings, 1x sales, 5.5x book value. Analyst consensus currently expects earnings per share of around 8.00 USD with year‑over‑year growth of 12.19%. United Parcel Service Inc has an ongoing dividend policy and pays around 6.56 USD per share (6.49% yield).

What are the key metrics for UPS.NYSE?

Key metrics for UPS.NYSE include valuation (P/E 18.3, P/S 1.1, P/B 6.3), profitability (profit margin 6.29%, ROE 33.77%), and growth (revenue -3.20%, earnings 4.70%). Market capitalization is 100.71B USD. These metrics give an overview of the company's financial performance and valuation.

How has United Parcel Service Inc's stock price performed?

United Parcel Service Inc's stock has returned — over 1 year, — over 3 years, and — over 5 years. Performance can vary depending on market conditions and company developments.

How is UPS.NYSE valued?

UPS.NYSE has the following valuation metrics: P/E Ratio: 18.3, P/S Ratio: 1.1, P/B Ratio: 6.3. These metrics help assess whether the stock is fairly valued compared to its fundamentals.

What are the growth catalysts for United Parcel Service Inc?

The key growth catalysts for United Parcel Service Inc are:
  • Smooth reduction of Amazon volumes by mid-2026 without margin pressure
  • Court decision or settlement in Teamsters proceedings that does not block restructuring
  • Further automation successes and visible margin improvement in H2 2026
  • Additional growth in customs clearance business after de minimis abolition
These factors can positively influence the company's future growth and performance.

What are the key risks when investing in UPS.NYSE?

Key risks for UPS.NYSE include: UPS operates in a global parcel, freight and logistics market alongside meaningful public competitors including FedEx, Deutsche Post DHL Group, Amazon Logistics, XPO and C.H. Robinson.[web:1][web:16][web:14][web:21][web:18] A secondary tier of regional, tech-enabled carriers—OnTrac, LaserShip, Veho among them—continues to grow and increasingly captures volume during peak periods, either supplementing or displacing traditional incumbents.[web:10][web:8][web:6] The company faces structural headwinds: customers building their own logistics capabilities, rising labor costs colliding with tight capacity, the operational drag of international customs and regulatory frameworks, and persistent margin pressure from competitive intensity.[web:2][web:10][web:1][web:21]
  • Customer insourcing—Amazon Logistics in particular—is pulling parcel volumes and shifting the revenue mix away.
  • Peak-period capacity constraints and rising driver labor costs are pressuring operating expenses while creating service disruption risk.
  • Cross-border regulatory hurdles, customs backlogs, and trade friction are disrupting international express and freight flows.[web:1][web:9]
  • Pricing and margin pressure from integrated 3PLs, freight forwarders, and tech-enabled last-mile competitors like XPO, C.H. Robinson, and Veho.[web:21][web:18][web:8]
Investors should consider these risk factors carefully before making an investment decision.

Who are the main competitors of United Parcel Service Inc?

United Parcel Service Inc competes with several listed peers in its sector. UPS operates in a tight global parcel and logistics market alongside formidable competitors—FedEx, Deutsche Post (DHL), Amazon, and XPO Logistics—where the real battles are fought over scale, pricing power, last-mile delivery, and integrated e-commerce fulfillment [web:4][web:3][web:6][web:13]. This competitive intensity squeezes margins and demands relentless capital deployment just to stay competitive [web:4][web:6]. Layer in operational complexity, labor negotiations, fuel volatility, and the shifting maze of cross-border regulations, and you get a business where earnings and cash flow can swing harder than the headline numbers suggest [web:3][web:4].
  • FedEx Corporation (FDX.NYSE)
  • Amazon.com, Inc. (AMZN.NASDAQ)
  • XPO Logistics, Inc. (XPO.NYSE)
These competitors influence pricing power, growth opportunities and relative valuation.

When does United Parcel Service Inc report earnings?

United Parcel Service Inc's next earnings report date is July 28, 2026.

Key Metrics

From recommendation (February 16, 2026)

Market Capitalization
100.71B USD
P/E Ratio
18.25
Analyst Target Price
113.18 USD

Valuation Metrics

P/S Ratio
1.15
P/B Ratio
6.27

Profitability Metrics

Profit Margin
6.29%
Operating Margin
10.71%
Return on Equity
33.77%
Return on Assets
7.02%

Growth Metrics

Revenue Growth
-3.20%
Earnings Growth
4.70%

Dividend history

Long-term record of paid dividends (amount per share and dividend yield at the time of payment).

YearDividendYield at paymentAvg. yield
20261.64 USD1.66%1.28%
20261.64 USD1.38%
20251.64 USD1.71%
20251.64 USD1.85%
20251.64 USD1.62%
20251.64 USD1.41%
20241.63 USD1.22%
20241.63 USD1.26%
20241.63 USD1.10%
20241.63 USD1.11%
20231.62 USD1.16%
20231.62 USD0.90%
20231.62 USD0.95%
20231.62 USD0.87%
20221.52 USD0.93%

Earnings history & estimates

Historical earnings performance shows how consistently the company meets or exceeds analyst expectations. Forward estimates provide insight into expected profitability and growth trajectory.

Historical earnings performance

67%
Beat estimate
17.9%
Miss estimate
+7.46%
Avg surprise when beat
-3.83%
Avg surprise when miss

Reports analyzed: 106

Upcoming earnings report

July 28, 2026
Next earnings date · USD

Analyst estimates for upcoming periods

Next year
December 31, 2027
Consensus8.00
Range7.00 – 8.70
26 analysts
Est. growth vs prior: 12.19%
Revisions: 7d ↑1 ↓0 · 30d ↑12 ↓7
Next quarter
September 30, 2026
Consensus1.73
Range1.57 – 1.91
21 analysts
Est. growth vs prior: -0.57%
Revisions: 7d ↑8 ↓0 · 30d ↑9 ↓10

Key financial figures

All figures in USD

Selected income statement, balance sheet and cash flow figures. Annual and quarterly, based on reported IFRS/GAAP financials.

20252024202320222021
Revenue88.64B90.89B90.75B100.03B97.20B
Operating income (EBIT)8.47B8.69B9.37B15.52B17.28B
Net income5.57B5.78B6.71B11.55B12.89B
Free cash flow4.76B6.21B5.08B9.34B10.81B
Total assets73.09B70.07B70.86B71.12B69.41B
Equity16.23B16.72B17.31B19.79B14.25B
Net debt26.40B19.54B23.56B17.92B15.27B

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