UPS (UPS) faced “continuing softness” on domestic-packages volumes Q4, partly countering the company’s expectations for a partial recovery, UBS said Wednesday in a report.
UBS cited FedEx (FDX) results in the November quarter and “other mixed indicators regarding transport activity during peak.”
UPS’ domestic-package volumes in Q4 probably fell 7% from a year earlier, compared with an 11.5% drop in Q3, and the decline in volume will put pressure on the company’s margin performance, UBS said.
UBS lowered the company’s Q4 earnings per share estimate to $2.40 from $2.59 on expectations for single-digit revenue growth and soft volumes.
The company is also facing “a significant headwind” from the Teamster contract, UBS said.
UBS cut its 2024 EPS estimate to $8.90 from $9.52.
UBS raised its price target on the company to $165 from $151, while maintaining the neutral rating.
UPS shares fell 1.1% in recent Wednesday trading.