Back to top

Image: Bigstock

United Parcel Service (UPS) Outpaces Stock Market Gains: What You Should Know

Read MoreHide Full Article

In the latest trading session, United Parcel Service (UPS - Free Report) closed at $174.44, marking a +0.23% move from the previous day. This move outpaced the S&P 500's daily gain of 0.01%. Meanwhile, the Dow gained 0.39%, and the Nasdaq, a tech-heavy index, lost 0.36%.

Coming into today, shares of the package delivery service had gained 8.95% in the past month. In that same time, the Transportation sector gained 2.65%, while the S&P 500 gained 2.55%.

Investors will be hoping for strength from UPS as it approaches its next earnings release, which is expected to be October 28, 2020. On that day, UPS is projected to report earnings of $1.80 per share, which would represent a year-over-year decline of 13.04%. Our most recent consensus estimate is calling for quarterly revenue of $19.95 billion, up 8.94% from the year-ago period.

UPS's full-year Zacks Consensus Estimates are calling for earnings of $6.98 per share and revenue of $80.56 billion. These results would represent year-over-year changes of -7.3% and +8.73%, respectively.

Investors might also notice recent changes to analyst estimates for UPS. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.04% higher within the past month. UPS is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, UPS is currently trading at a Forward P/E ratio of 24.93. For comparison, its industry has an average Forward P/E of 18.13, which means UPS is trading at a premium to the group.

Meanwhile, UPS's PEG ratio is currently 3.15. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Transportation - Air Freight and Cargo was holding an average PEG ratio of 2.33 at yesterday's closing price.

The Transportation - Air Freight and Cargo industry is part of the Transportation sector. This group has a Zacks Industry Rank of 7, putting it in the top 3% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


United Parcel Service, Inc. (UPS) - free report >>

Published in