CFRA Keeps Hold Opinion On Shares Of United Parcel Service, Inc.

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 of $148, cut $6, reflects a 15x multiple of our revised 2025 EPS estimate, in line with UPS’s historical forward average. We cut our 2024 EPS estimate by $0.96 to $8.36 and 2025’s by $0.71 to $9.89. UPS held an Investor Day event today, outlining strategic and financial targets through 2026. UPS has guided for 2026 revenues in the range of $108B-$114B, an implied CAGR of 6.8%, but also reiterated its 2024 revenue guidance of $92.0B-$94.5B. At the midpoint of these ranges, we note that the cadence of revenue growth guidance suggests just 2.3% in 2024, but then accelerating ~4x to the 9% range in 2025 and 2026, which we think is highly aggressive barring a major uptick in market volumes. On the margin front, we similarly think management is asking both 2025 and 2026 to do a lot of heavy lifting to achieve its 2026 target of 13% (versus 10.9% in 2023). UPS is aiming to expand share in small premium business, but we are somewhat wary that gains in revenue per piece may be muted.

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