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Here's Why United Parcel Service (UPS) Fell More Than Broader Market

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In the latest close session, United Parcel Service (UPS - Free Report) was down 2.53% at $85.23. This change lagged the S&P 500's 0.69% loss on the day. On the other hand, the Dow registered a loss of 0.55%, and the technology-centric Nasdaq decreased by 0.82%.

Prior to today's trading, shares of the package delivery service had gained 2.85% lagged the Transportation sector's gain of 5.11% and the S&P 500's gain of 3.79%.

Analysts and investors alike will be keeping a close eye on the performance of United Parcel Service in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $1.35, reflecting a 23.3% decrease from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $20.86 billion, down 6.21% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $6.53 per share and revenue of $87.51 billion. These totals would mark changes of -15.41% and -3.91%, respectively, from last year.

Investors should also pay attention to any latest changes in analyst estimates for United Parcel Service. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.25% lower. As of now, United Parcel Service holds a Zacks Rank of #4 (Sell).

Investors should also note United Parcel Service's current valuation metrics, including its Forward P/E ratio of 13.4. This expresses no noticeable deviation compared to the average Forward P/E of 13.4 of its industry.

It's also important to note that UPS currently trades at a PEG ratio of 1.6. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Transportation - Air Freight and Cargo industry was having an average PEG ratio of 1.6.

The Transportation - Air Freight and Cargo industry is part of the Transportation sector. Currently, this industry holds a Zacks Industry Rank of 99, positioning it in the top 41% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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