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UPS Soars 71.1% in the Past 6 Months: More Room for Rally?
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Shares of United Parcel Service (UPS - Free Report) have been displaying an uptrend of late, having gained 71.1% in the past six months, way ahead of the S&P 500 Index’s 19.7% appreciation in the same time period.
Let’s delve into the reasons for this upbeat price performance and try to analyze if there is scope for a further upside.
UPS is benefiting from a significant increase in home deliveries amid the prevalent coronavirus pandemic. Notably, the need for door-to-door delivery of essentials during this crisis is rising. Owing to the surge in residential delivery volumes and strong outbound demand from Asia, UPS performed impressively in each of the three quarters of 2020.
Moreover, even in this coronavirus-hit scenario, UPS has generated solid free cash flow so far this year. This is a major positive and might lead to an uptick in the company’s shareholder-friendly activities. Notably, UPS paid out dividends worth $2.7 billion in the first nine months of 2020, up 5.2% year over year. Moreover, it generated free cash flow of $5.9 billion on an adjusted basis in the first nine months of 2020.
With the pandemic showing little signs of subsiding, e-commerce demand is likely to continue soaring in the near term. This bodes well for UPS. Additionally, the current holiday season should add an impetus to the company’s prospects.
Moreover, UPS is currently looking to be a key player in the distribution of coronavirus vaccine once such a product is available in the market. Recently, there was some encouraging news on the vaccine front. For example, the final data from a phase III study on Pfizer (PFE - Free Report) / BioNTech’s (BNTX - Free Report) mRNA-based coronavirus vaccine candidate BNT162b2 demonstrated its 95% effectiveness in preventing COVID-19. Moderna’s (MRNA - Free Report) vaccine candidate demonstrated an efficacy of 94.5% in the first interim analysis.
The above positive data certainly raised hopes of a vaccine’s imminent availability in the market to combat the dreaded disease. UPS is looking to facilitate distribution efforts, once the vaccine is commercially available.
Courtesy of service enhancements at UPS, the company’s Healthcare unit is now capable of producing up to 1,200 lbs of dry ice per hour in its facilities in the United States. The ramped-up production rate will support the storage and transportation of cold chain products, such as frozen vaccines. The same will also enable this currently Zacks Rank #2 (Buy) company to make dry ice available for U.S. and Canadian hospitals, clinics and other points of care that need dry ice to store vaccines locally. UPS’ focus on aiding the distribution efforts of the coronavirus vaccine also bodes well and might aid the stock further.
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
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UPS Soars 71.1% in the Past 6 Months: More Room for Rally?
Shares of United Parcel Service (UPS - Free Report) have been displaying an uptrend of late, having gained 71.1% in the past six months, way ahead of the S&P 500 Index’s 19.7% appreciation in the same time period.
Let’s delve into the reasons for this upbeat price performance and try to analyze if there is scope for a further upside.
UPS is benefiting from a significant increase in home deliveries amid the prevalent coronavirus pandemic. Notably, the need for door-to-door delivery of essentials during this crisis is rising. Owing to the surge in residential delivery volumes and strong outbound demand from Asia, UPS performed impressively in each of the three quarters of 2020.
Moreover, even in this coronavirus-hit scenario, UPS has generated solid free cash flow so far this year. This is a major positive and might lead to an uptick in the company’s shareholder-friendly activities. Notably, UPS paid out dividends worth $2.7 billion in the first nine months of 2020, up 5.2% year over year. Moreover, it generated free cash flow of $5.9 billion on an adjusted basis in the first nine months of 2020.
With the pandemic showing little signs of subsiding, e-commerce demand is likely to continue soaring in the near term. This bodes well for UPS. Additionally, the current holiday season should add an impetus to the company’s prospects.
Moreover, UPS is currently looking to be a key player in the distribution of coronavirus vaccine once such a product is available in the market. Recently, there was some encouraging news on the vaccine front. For example, the final data from a phase III study on Pfizer (PFE - Free Report) / BioNTech’s (BNTX - Free Report) mRNA-based coronavirus vaccine candidate BNT162b2 demonstrated its 95% effectiveness in preventing COVID-19. Moderna’s (MRNA - Free Report) vaccine candidate demonstrated an efficacy of 94.5% in the first interim analysis.
The above positive data certainly raised hopes of a vaccine’s imminent availability in the market to combat the dreaded disease. UPS is looking to facilitate distribution efforts, once the vaccine is commercially available.
Courtesy of service enhancements at UPS, the company’s Healthcare unit is now capable of producing up to 1,200 lbs of dry ice per hour in its facilities in the United States. The ramped-up production rate will support the storage and transportation of cold chain products, such as frozen vaccines. The same will also enable this currently Zacks Rank #2 (Buy) company to make dry ice available for U.S. and Canadian hospitals, clinics and other points of care that need dry ice to store vaccines locally. UPS’ focus on aiding the distribution efforts of the coronavirus vaccine also bodes well and might aid the stock further.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>