The COVID-19 epidemic has significantly boosted Internet sales, with increasing demand for United Parcel Service (UPS) package delivery services. This has created strong momentum for the stock over the past year. In addition, as the Internet shopping trend is expected to continue in the coming months, we believe that UPS stocks should continue to improve. To read.
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United Parcel Services, Inc. (UPS), Sekkas, NJ, provides letter and package delivery, transportation, logistics and other related services. The US Domestic Package and the International Package are two operational segments of the company.
The company’s share price has risen 20.6% in the last year and 13.9% in the last six months which closed at $ 206.64 in yesterday’s trading session.
Also, as shoppers become increasingly dependent on online platforms for shopping, many retailers have shifted their focus to their online presence. These factors have benefited UPS, as retailers, unable to cope with the pressure on their delivery systems, have turned to UPS to deliver online-ordered goods.
Here’s how to shape UPS performance in the near term:
Positive development
Last month, UPS announced the entry of its 1,495 drivers, including 38 from Canada, in the Circle of Honor, an exclusive group of UPS drivers who have not had an accident in the last 25 years or more. This new class of drivers from four continents represents a total of 37,375 years of safe driving experience.
Strategic collaboration
Last month, ESW, a leading global direct-to-consumer (DTC) e-commerce company, announced a partnership with UPS to provide integrated international e-commerce and shipping capabilities for brands seeking to accelerate their DTC expansion. Might be more. Effective in reaching customers worldwide through cross-border e-commerce. UPS customers and ESW clients will benefit from the ability to fully localize their online shopping experience and use UPS’s worldwide transportation and customs brokerage infrastructure for delivery through this new packaged solution.
Strong profitability
UPS’s 13.3% trailing-12-month net income margin is 103.7% higher than the 6.5% industry average. Also, its ROC, EBITDA margin, and ROA are 335.6%, 48.8%, and 260.6%, higher than the industry average. In addition, its $ 15.01 billion in cash from operations 74 199.15 million is 7435.7% higher than the industry average.
Impressive growth potential
Street expects UPS revenue and EPS to grow by 4.9% and 5.8%, respectively, year-on-year to 20 102.01 billion and $ 12.83 billion in FY2022. In addition, UPS’s EPS is expected to grow at a CAGR of 14%. The next five years. And the company has an amazing history of impressive earnings; This is at the top of the Wall Street EPS estimate in each of the last four quarters.
Consensus rating and price target indicate potential upward trend
Of the 20 Wall Street analysts who rated the UPS, 11 bought it and eight held it. The 12-month average price target of 1 241.35 indicates a 16.8% potential uptrend. Price targets range from a low of $ 150.00 to a high of $ 275.00.
POWR ratings reflect solid possibilities
UPS has an overall B grade, which is equivalent to a buy rating in our proprietary POWR rating system. POWR ratings are calculated taking into account 118 individual factors, each factor weighing to an optimal degree.
Our proprietary rating system evaluates each stock based on eight distinct categories. UPS has A grade for sentiment and B for quality. Analysts’ ratings and price targets are consistent with sentiment grades. In addition, the solid profitability of UPS is consistent with the quality grade.
Out of 17 stocks in the A-rated air freight and shipping services industry, UPS ranks # 6.
Beyond what I said above, we have graded UPS for quality, growth, stability and speed. Get all UPS ratings here.
The last row
With a thriving e-commerce industry and growing online sales, UPS is expected to witness strong growth. Moreover, UPS may be the primary driver of growth for various business companies. In addition, given the sentiment of favorable analysts, the stock may continue to rally in the coming months. So, we think the stock could be a great bet right now.
How does United Parcel Services Inc. (UPS) stack up against its peers?
UPS has an overall POWR rating of B, which is equal to a buy rating. See these other stocks with an A (Strong Buy) rating in the same industry: Universal Logistics Holdings Inc. (ULH) and Deutsche Post AG (DPSGY), and Bristow Group Inc. (VTOL), which has a B (BUY) rating
UPS is trading at $ 202.90 per share on Monday morning, down $ 3.74 (-1.81%). Year-to-date, the UPS declined -4.65%, while the benchmark S&P 500 index rose -4.32% over the same period.
About the Author: Pragya Pandey
Pragya is an equity research analyst and financial journalist with a passion for investing. In college he did a major in finance and is currently pursuing a CFA program and is a second tier candidate.
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