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UPS to Report Q1 Earnings: Should You Buy, Sell or Hold the Stock?
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Key Takeaways
UPS reports Q1 2026 on April 28; consensus EPS is pegged at $1.06 and revenues at $21.08B.
The Middle East conflict and jump in oil prices are expected to pressure UPS results.
Tariffs, de minimis expiry and Amazon volume cut may mute UPS' volumes in Q1.
United Parcel Service (UPS - Free Report) is scheduled to report its first-quarter 2026 results on April 28, 2026, before the market opens. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $1.06 and $21.08 billion, respectively.
The bottom-line projection indicates a year-over-year decline of 28.9%. The consensus mark for the to-be-reported quarter has been revised downward 8 cents over the past 60 days. The Zacks Consensus Estimate for quarterly revenues implies a year-over-year contraction of 2.2%.
Image Source: Zacks Investment Research
For 2026, the Zacks Consensus Estimate for UPS’ revenues is pegged at $89.28 billion, implying a 0.7% year-over-year uptick. The consensus mark for 2026 EPS is pegged at $7.07, indicating a year-over-year decline of 1.3%.
In the trailing four quarters, this package delivery company’s earnings beat estimates on three occasions and missed on the other, with the average surprise being 10.7%
Our proven model does not predict an earnings beat for UPS for the March quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
We expect the elevated macro uncertainty due to the Middle East conflict to have dented UPS’ performance in the March quarter. The ongoing conflict in the Middle East has resulted in a sharp jump in oil prices. In the month of March alone, oil prices gained in excess of 50%. This has been naturally hurting the bottom line of transportation stocks, like UPS. This is because fuel expenses represent a key input cost for a transportation company.
Tariffs on low-value parcels, particularly from China, are likely to have hurt UPS’ performance as well by affecting last-mile delivery volumes. To address weak revenues, primarily due to low shipment volumes and tariff-related economic uncertainty, the company has been reconfiguring its U.S. network to boost efficiency. We forecast total operating revenues to decline 2.5% year over year in the March quarter, with consolidated volumes likely to drop 9.6%.
The De Minimis exemption expired last year. The trade exemption allowed packages containing goods valued at less than $800 to enter the United States without additional taxes. This development is expected to have hurt the International segment volumes in the to-be-reported quarter by diverting volumes away from the China-U.S. trade lane.
UPS’ decision to scale back business with Amazon (AMZN - Free Report) is expected to have kept first-quarter volumes muted. Management reached an agreement in principle with Amazon to reduce the e-commerce giant’s volume by more than 50% by June 2026. CEO Carol Tome noted that Amazon was not the company’s most profitable customer. The reduction in volumes is compelling UPS to right-size its network.
First-quarter results are likely to reflect UPS’ efforts toward improving profitability over sheer volume, through its "Better, Not Bigger" strategy. Under the cost-cutting initiatives, UPS has substantially reduced its U.S. operational workforce and closed daily operations at multiple leased and owned buildings. Moreover, UPS has been focusing on increasing automation in sorting and operations and leveraging AI for logistics planning to boost efficiency.
The shift in focus toward higher-margin areas such as small and medium-sized businesses or SMBs and healthcare logistics from low-margin volumes (like Amazon) is expected to be reflected in UPS’ first-quarter results. Notably, SMBs contributed 31.2% to total U.S. volume in the December quarter, reflecting a 340-basis point year-over-year improvement. We expect SMBs to have performed strongly in the March quarter as well, boosting results.
UPS Underperforms on Price Front
Shares of UPS have gained in single digits (% wise) in a year compared with the Zacks Transportation-Air Freight and Cargo industry and rival FedEx's (FDX - Free Report) double-digit gain in the same timeframe.
1-Year Price Comparison
Image Source: Zacks Investment Research
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. UPS and FedEx each currently have a Value Score of B.
UPS’ P/S F12M Vs. Industry & FDX
Image Source: Zacks Investment Research
Investment Thesis for UPS Stock
UPS is looking to grow its per-package revenue by gaining more business in segments like healthcare. A few years back, UPS acquired Bomi Group, an industry-leading multinational healthcare logistics provider. Last year, UPS acquired Andlauer Healthcare Group as part of its commitment to offer global specialty capabilities. UPS aims to double its healthcare revenues to $20 billion in 2026 from 2023 levels.
Owing to the strategic shift, UPS has not increased the quarterly dividend this year, freezing it at $1.64 per quarter ($6.56 annually). In the event of the company failing to put an end to its struggles through the strategic shift, the high payout ratio may lead to a dividend cut, which would be disastrous for dividend investors.
End Note
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 and volume declines, are hard to ignore.
So, all in all, it is worth holding on to UPS stock for now. Betting on the stock ahead of its upcoming results does not seem like a good idea. It is better to wait for management’s commentary on volumes and cost-cutting efforts, apart from the updated 2026 guidance, to get more clarity on near-term prospects.
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UPS to Report Q1 Earnings: Should You Buy, Sell or Hold the Stock?
Key Takeaways
United Parcel Service (UPS - Free Report) is scheduled to report its first-quarter 2026 results on April 28, 2026, before the market opens. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $1.06 and $21.08 billion, respectively.
The bottom-line projection indicates a year-over-year decline of 28.9%. The consensus mark for the to-be-reported quarter has been revised downward 8 cents over the past 60 days. The Zacks Consensus Estimate for quarterly revenues implies a year-over-year contraction of 2.2%.
For 2026, the Zacks Consensus Estimate for UPS’ revenues is pegged at $89.28 billion, implying a 0.7% year-over-year uptick. The consensus mark for 2026 EPS is pegged at $7.07, indicating a year-over-year decline of 1.3%.
In the trailing four quarters, this package delivery company’s earnings beat estimates on three occasions and missed on the other, with the average surprise being 10.7%
United Parcel Service Price and EPS Surprise
United Parcel Service price-eps-surprise | United Parcel Service Quote
Q1 Earnings Whispers for UPS
Our proven model does not predict an earnings beat for UPS for the March quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
UPS has an Earnings ESP of -4.82% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping UPS’ Quarterly Performance
We expect the elevated macro uncertainty due to the Middle East conflict to have dented UPS’ performance in the March quarter. The ongoing conflict in the Middle East has resulted in a sharp jump in oil prices. In the month of March alone, oil prices gained in excess of 50%. This has been naturally hurting the bottom line of transportation stocks, like UPS. This is because fuel expenses represent a key input cost for a transportation company.
Tariffs on low-value parcels, particularly from China, are likely to have hurt UPS’ performance as well by affecting last-mile delivery volumes. To address weak revenues, primarily due to low shipment volumes and tariff-related economic uncertainty, the company has been reconfiguring its U.S. network to boost efficiency. We forecast total operating revenues to decline 2.5% year over year in the March quarter, with consolidated volumes likely to drop 9.6%.
The De Minimis exemption expired last year. The trade exemption allowed packages containing goods valued at less than $800 to enter the United States without additional taxes. This development is expected to have hurt the International segment volumes in the to-be-reported quarter by diverting volumes away from the China-U.S. trade lane.
UPS’ decision to scale back business with Amazon (AMZN - Free Report) is expected to have kept first-quarter volumes muted. Management reached an agreement in principle with Amazon to reduce the e-commerce giant’s volume by more than 50% by June 2026. CEO Carol Tome noted that Amazon was not the company’s most profitable customer. The reduction in volumes is compelling UPS to right-size its network.
First-quarter results are likely to reflect UPS’ efforts toward improving profitability over sheer volume, through its "Better, Not Bigger" strategy. Under the cost-cutting initiatives, UPS has substantially reduced its U.S. operational workforce and closed daily operations at multiple leased and owned buildings. Moreover, UPS has been focusing on increasing automation in sorting and operations and leveraging AI for logistics planning to boost efficiency.
The shift in focus toward higher-margin areas such as small and medium-sized businesses or SMBs and healthcare logistics from low-margin volumes (like Amazon) is expected to be reflected in UPS’ first-quarter results. Notably, SMBs contributed 31.2% to total U.S. volume in the December quarter, reflecting a 340-basis point year-over-year improvement. We expect SMBs to have performed strongly in the March quarter as well, boosting results.
UPS Underperforms on Price Front
Shares of UPS have gained in single digits (% wise) in a year compared with the Zacks Transportation-Air Freight and Cargo industry and rival FedEx's (FDX - Free Report) double-digit gain in the same timeframe.
1-Year Price Comparison
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. UPS and FedEx each currently have a Value Score of B.
UPS’ P/S F12M Vs. Industry & FDX
Investment Thesis for UPS Stock
UPS is looking to grow its per-package revenue by gaining more business in segments like healthcare. A few years back, UPS acquired Bomi Group, an industry-leading multinational healthcare logistics provider. Last year, UPS acquired Andlauer Healthcare Group as part of its commitment to offer global specialty capabilities. UPS aims to double its healthcare revenues to $20 billion in 2026 from 2023 levels.
Owing to the strategic shift, UPS has not increased the quarterly dividend this year, freezing it at $1.64 per quarter ($6.56 annually). In the event of the company failing to put an end to its struggles through the strategic shift, the high payout ratio may lead to a dividend cut, which would be disastrous for dividend investors.
End Note
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 and volume declines, are hard to ignore.
So, all in all, it is worth holding on to UPS stock for now. Betting on the stock ahead of its upcoming results does not seem like a good idea. It is better to wait for management’s commentary on volumes and cost-cutting efforts, apart from the updated 2026 guidance, to get more clarity on near-term prospects.