We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Consensus Estimate for the September-quarter earnings is pegged at $1.31 per share, implying a 25.6% decrease from the year-ago quarter’s reported number. The estimate has been revised downward by 5 cents per share over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for revenues is pegged at $20.84 billion, indicating a decline of 6.3% from the year-ago quarter’s actuals. UPS has an impressive earnings surprise history, as reflected in the chart below.
Image Source: Zacks Investment Research
Given this backdrop, let us examine the factors likely to influence UPS’ third-quarter results.
Shipping volumes at UPS are likely to have been hurt by geopolitical uncertainties and high inflation. Uncertainty over tariffs, supply-chain instability and other broader macroeconomic headwinds are likely to hurt results. We believe that more than the financial numbers, it is the guidance that investors will more closely watch.
Labor costs are likely to have been high, hurting United Parcel Service’s bottom-line performance in the September quarter. Faced with these headwinds, the company has been focusing on cutting costs. As part of this exercise, UPS is offering buyouts to delivery drivers for the first time in its 117-year history. UPS’ full-time drivers are eligible for this offer. We expect an update on the same on the conference call.
Apart from the tariff-induced economic uncertainties, UPS’ decision to reduce business with its largest customer, Amazon (AMZN - Free Report) , contributed to the decision to trim the workforce. UPS’ management has reached an agreement in principle with Amazon to lower the latter’s volume by more than 50% by June 2026. According to Carol Tome, UPS’ chief executive officer, Amazon was not its most profitable customer.
The De Minimis exemption had expired on Aug. 29. The trade exemption allowed packages containing goods valued at less than $800 to enter the United States without additional taxes. In July, President Trump signed the executive order to eliminate the exemption. Per a recent NBC News report, the accumulation of packages in UPS warehouses has compelled it to discard some shipments due to severe customs bottlenecks.
UPS has been facing customer backlash with allegations that it has been discarding certain international shipments before they reach their intended destinations. An update on that front is also expected on the third-quarter conference call.
Low fuel costs are expected to have aided UPS’ bottom-line performance in the September-end quarter. We expect expenses on fuel to decrease 7.6% from the third-quarter 2024 actuals. Tariff concerns, weakening consumer confidence and production increase by OPEC+ have all contributed to this downward pressure on crude oil.
Q3 Earnings Whispers for UPS
Our proven model does not conclusively predict an earnings beat for UPS this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat, which is not the case here.
The company's Earnings ESP is -1.04%. This is because the Most Accurate Estimate is currently pegged at $1.29 per share, 2 cents below the Zacks Consensus Estimate.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Unimpressive Price Performance of UPS Stock
Shares of UPS have plunged in excess of 30% so far this year compared with the Zacks Transportation—Air Freight and Cargo industry’s 22.4% decline. Rival FedEx's (FDX - Free Report) price performance is better than that of UPS.
YTD Price Comparison
Image Source: Zacks Investment Research
Valuation Picture
On the basis of the forward 12-month Price/Sales (P/S), UPS’ shares are trading at a discount compared with the industry average. Rival FedEx is cheaper. FedEx currently has a Value Score of A, like UPS.
UPS’ P/S F12M Vs. Industry & FDX
Image Source: Zacks Investment Research
Investment Thesis for UPS Stock
Due to the decline in shipping demand, volumes at UPS have suffered. A slowdown in online sales in the United States, apart from a softness in global manufacturing activity, has been hurting the demand scenario.
Moreover, the recent failure of the Estafeta deal represents a setback to UPS’ expansion efforts. UPS cited the inability to satisfy all closing conditions as the reason for the cancellation. The deal was announced in 2024, as a part of UPS’ “Better and Bolder” strategy to become the world's premium international small package and logistics provider.
Concerns over the sustainability of UPS’ dividends in this era of demand weakness represent a further challenge for this parcel delivery company. However, UPS’ expansion efforts look good.
What Should Investors Do With UPS Stock?
It is worth noting that the company has the brand and the network to continue generating steady cash flows in the long run. This makes UPS a compelling long-term player in the transportation space. However, the near-term headwinds, including the tariff-induced uncertainties, are hard to ignore. The combination of its weak current performance and an uncertain future casts a shadow over UPS’ prospects.
Though the company has a solid track record of beating earnings estimates, it will be prudent for investors to stay away from investing in the stock for now and wait for the upcoming quarterly results to get more clarity on near-term prospects.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Buy, Hold or Sell UPS Stock: Key Tips Ahead of Q3 Earnings
Key Takeaways
United Parcel Service (UPS - Free Report) is scheduled to report its third-quarter 2025 results on Oct. 28, 2025.
The Zacks Consensus Estimate for the September-quarter earnings is pegged at $1.31 per share, implying a 25.6% decrease from the year-ago quarter’s reported number. The estimate has been revised downward by 5 cents per share over the past 60 days.
The Zacks Consensus Estimate for revenues is pegged at $20.84 billion, indicating a decline of 6.3% from the year-ago quarter’s actuals.
UPS has an impressive earnings surprise history, as reflected in the chart below.
Given this backdrop, let us examine the factors likely to influence UPS’ third-quarter results.
Shipping volumes at UPS are likely to have been hurt by geopolitical uncertainties and high inflation. Uncertainty over tariffs, supply-chain instability and other broader macroeconomic headwinds are likely to hurt results. We believe that more than the financial numbers, it is the guidance that investors will more closely watch.
Labor costs are likely to have been high, hurting United Parcel Service’s bottom-line performance in the September quarter. Faced with these headwinds, the company has been focusing on cutting costs. As part of this exercise, UPS is offering buyouts to delivery drivers for the first time in its 117-year history. UPS’ full-time drivers are eligible for this offer. We expect an update on the same on the conference call.
Apart from the tariff-induced economic uncertainties, UPS’ decision to reduce business with its largest customer, Amazon (AMZN - Free Report) , contributed to the decision to trim the workforce. UPS’ management has reached an agreement in principle with Amazon to lower the latter’s volume by more than 50% by June 2026. According to Carol Tome, UPS’ chief executive officer, Amazon was not its most profitable customer.
The De Minimis exemption had expired on Aug. 29. The trade exemption allowed packages containing goods valued at less than $800 to enter the United States without additional taxes. In July, President Trump signed the executive order to eliminate the exemption. Per a recent NBC News report, the accumulation of packages in UPS warehouses has compelled it to discard some shipments due to severe customs bottlenecks.
UPS has been facing customer backlash with allegations that it has been discarding certain international shipments before they reach their intended destinations. An update on that front is also expected on the third-quarter conference call.
Low fuel costs are expected to have aided UPS’ bottom-line performance in the September-end quarter. We expect expenses on fuel to decrease 7.6% from the third-quarter 2024 actuals. Tariff concerns, weakening consumer confidence and production increase by OPEC+ have all contributed to this downward pressure on crude oil.
Q3 Earnings Whispers for UPS
Our proven model does not conclusively predict an earnings beat for UPS this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat, which is not the case here.
The company's Earnings ESP is -1.04%. This is because the Most Accurate Estimate is currently pegged at $1.29 per share, 2 cents below the Zacks Consensus Estimate.
UPS currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Unimpressive Price Performance of UPS Stock
Shares of UPS have plunged in excess of 30% so far this year compared with the Zacks Transportation—Air Freight and Cargo industry’s 22.4% decline. Rival FedEx's (FDX - Free Report) price performance is better than that of UPS.
YTD Price Comparison
Valuation Picture
On the basis of the forward 12-month Price/Sales (P/S), UPS’ shares are trading at a discount compared with the industry average. Rival FedEx is cheaper. FedEx currently has a Value Score of A, like UPS.
UPS’ P/S F12M Vs. Industry & FDX
Investment Thesis for UPS Stock
Due to the decline in shipping demand, volumes at UPS have suffered. A slowdown in online sales in the United States, apart from a softness in global manufacturing activity, has been hurting the demand scenario.
Moreover, the recent failure of the Estafeta deal represents a setback to UPS’ expansion efforts. UPS cited the inability to satisfy all closing conditions as the reason for the cancellation. The deal was announced in 2024, as a part of UPS’ “Better and Bolder” strategy to become the world's premium international small package and logistics provider.
Concerns over the sustainability of UPS’ dividends in this era of demand weakness represent a further challenge for this parcel delivery company. However, UPS’ expansion efforts look good.
What Should Investors Do With UPS Stock?
It is worth noting that the company has the brand and the network to continue generating steady cash flows in the long run. This makes UPS a compelling long-term player in the transportation space. However, the near-term headwinds, including the tariff-induced uncertainties, are hard to ignore. The combination of its weak current performance and an uncertain future casts a shadow over UPS’ prospects.
Though the company has a solid track record of beating earnings estimates, it will be prudent for investors to stay away from investing in the stock for now and wait for the upcoming quarterly results to get more clarity on near-term prospects.