Concerning UPS (NYSE: UPS), Wall Street experts can't agree. Although a number of analysts reduced their stock price goals following the company's Investor and Analyst Day presentation, Oliver Holmes of Redburn Atlantic upgraded his rating to "buy" from "neutral" and set a price objective of $180. From where it is now, that would be an 18% increase. Let's have a look at the reasoning for this perspective.
Advancement in UPS analyst As reported by Thefly.com, Holmes asserts that UPS is approaching a low point in critical indicators, such as volume and margin. As a matter of fact, UPS's upper management is of the opinion that the company's volume growth will ultimately increase throughout the year, beginning in the second quarter.
Because of fundamental improvements in the company's priority areas, such as healthcare and small and medium-sized businesses, the stock looks attractive in comparison to its 2026 projections
On the other hand, improvements in productivity and control of labor costs should be achieved by investments in technology and consolidation of sites.
Also, UPS may increase its business by regaining the trust of customers it lost last year as a result of the long-running labor dispute. Many of these companies shifted their volume distribution plans in anticipation of a potential strike.
Possibly a problem for UPS A worry makes me somewhat wary of the stock, even though I concur with the analyst's reasoning. The corporation still has a long way to go before it can meet its indicated first-half projection, as mentioned earlier in relation to CFO Brian Newman's report on first-quarter profits expectations. Adjusted operating profit is anticipated to fall by 40%.
On top of that, management is banking on rising per-item revenues in a market where supply is outpacing demand. Therefore, when management announces first-quarter profits on April 23, cautious investors will be eager to learn about its full-year 2024 guidance.
If UPS is having trouble meeting its full-year 2024 estimate, it will cast doubt on its three-year targets, which is the last thing investors want to hear. To turn things around, shares might be on the rise by the end of April if management confirms it's on pace to meet targets and year-over-year volumes are positive or will soon be.
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