CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
Our 12-month target price of $154, raised by $4, reflects a 14.5x multiple on our 2025 EPS estimate, a discount to UPS’s historical forward average, which we see merited by risk of extended headwinds on volume growth. We cut our 2024 EPS estimate by $1.09 to $9.32 and start 2025’s at $10.60. Q4 EPS of $2.47 vs. $3.62, beat the consensus view by $0.01. UPS is cutting 12,000 jobs (about 2% of the workforce) as volumes remain sluggish, a carry-over of Q3 weakness. Average daily volume was down 7.5% in Q4, consistent with the September exit rate (down 7.4%). However, December volumes were only down mid-single digits, which suggests stronger potential for better comps to arrive at some point in 2024, probably in the second half of the year. There were some Q4 unit cost improvements, despite the 12% hourly wage hike, which we think UPS achieved mainly on smarter use of network logistics and automation. Overall, we think there are brighter days ahead in 2025, but 2024 is likely to be choppy.