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UPS Backed by Strong Liquidity and Growth in E-Commerce
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We recently issued an updated report on United Parcel Service, Inc. (UPS - Free Report) .
UPS has a strong balance sheet. The company exited the third quarter with cash and equivalents of $9,241 million, above the current maturities of long-term debt, commercial paper, operating and finance leases of $2,942 million. This suggests that it has enough cash to meet its current debt obligations.
In this coronavirus-ravaged world, e-commerce is gaining momentum amid the social-distancing protocols, quarantine and lockdowns. Owing to the surge in residential delivery volumes and a strong outbound demand from Asia, UPS performed very well this year. Shares of UPS have gained 44.4% in a year compared with 64.2% growth of the industry.
Moreover, UPS generated impressive free cash flow so far this year. Notably, it generated a free cash flow of $5.9 billion on an adjusted basis in the first nine months of 2020.
Due to the uncertainties concerning the coronavirus pandemic, the company did not provide 2020 projections for revenues and earnings per share. Moreover, due to the coronavirus-induced weakness in the industrial sector, business to business volumes declined 7.8% year over year in the September quarter. With spiking cases triggering fears of another wave of the virus, weakness in the industrial sector is likely to prevail, at least in the near term. This will hurt UPS significantly.
Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, FedEx and Herc Holdings is pegged at 15%, 12% and 12.6%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
UPS Backed by Strong Liquidity and Growth in E-Commerce
We recently issued an updated report on United Parcel Service, Inc. (UPS - Free Report) .
UPS has a strong balance sheet. The company exited the third quarter with cash and equivalents of $9,241 million, above the current maturities of long-term debt, commercial paper, operating and finance leases of $2,942 million. This suggests that it has enough cash to meet its current debt obligations.
In this coronavirus-ravaged world, e-commerce is gaining momentum amid the social-distancing protocols, quarantine and lockdowns. Owing to the surge in residential delivery volumes and a strong outbound demand from Asia, UPS performed very well this year. Shares of UPS have gained 44.4% in a year compared with 64.2% growth of the industry.
Moreover, UPS generated impressive free cash flow so far this year. Notably, it generated a free cash flow of $5.9 billion on an adjusted basis in the first nine months of 2020.
Due to the uncertainties concerning the coronavirus pandemic, the company did not provide 2020 projections for revenues and earnings per share. Moreover, due to the coronavirus-induced weakness in the industrial sector, business to business volumes declined 7.8% year over year in the September quarter. With spiking cases triggering fears of another wave of the virus, weakness in the industrial sector is likely to prevail, at least in the near term. This will hurt UPS significantly.
Zacks Rank & Other Stocks to Consider
UPS currently carries a Zacks Rank #2 (Buy).
Investors interested in the broader Zacks Transportation sector can also consider stocks like Knight-Swift Transportation Holdings Inc. (KNX - Free Report) , FedEx Corporation (FDX - Free Report) and Herc Holdings Inc. (HRI - Free Report) . Knight-Swift carries a Zacks Rank #2, while FedEx and Herc Holdings sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, FedEx and Herc Holdings is pegged at 15%, 12% and 12.6%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>