Loop Capital cuts UPS stock price target to $115 from $120

Monday, Loop Capital Markets adjusted their price target on shares of United Parcel Service (NYSE:UPS), reducing it to $115 from the previous $120, while maintaining a Hold rating on the company’s stock. The adjustment follows a significant decline in UPS stock, which dropped 14% last week after the company disclosed plans to reduce its business with Amazon by 50% over the next 18 months. According to InvestingPro data, Amazon remains a dominant force with a $2.5 trillion market cap and over $620 billion in annual revenue, making this decision particularly significant for UPS’s future growth prospects.

The decision by UPS to scale back its dealings with Amazon is a strategic move as the company navigates changes in its business landscape. The reduction in business with one of its largest customers is a notable shift for UPS and has had an immediate impact on its stock value. Amazon’s strong position is evident in its recent performance, with InvestingPro data showing the stock trading near its 52-week high and posting an impressive 41.56% return over the past six months.

Loop Capital’s analyst cited the recent performance of UPS stock and the broader context of the logistics industry, which has been influenced by global trade tensions. The analyst noted that under normal circumstances, both UPS and its competitor FedEx (NYSE:FDX) would be candidates for a Sell rating. However, the significant loss in UPS’s stock value last week and the potential sale of FedEx’s less-than-truckload (LTL) business, FedEx Freight, which could unlock value for the company, have provided a reprieve for both companies.

The analysis also touched upon the potential implications of the ongoing trade war between the United States and other countries. The analyst suggested that the current situation for UPS and FedEx might change if the U.S. trade war shifts focus to the European Union, a scenario that President Trump has indicated could happen.

Investors and market watchers will be keeping a close eye on UPS as it adjusts its business relationship with Amazon and as global trade dynamics continue to evolve. The reduction in the price target reflects Loop Capital’s assessment of UPS’s current position and the challenges it faces in the near term. For deeper insights into both companies’ financial health and growth prospects, InvestingPro subscribers can access comprehensive Pro Research Reports, which transform complex Wall Street data into actionable intelligence for smarter investing decisions.

In other recent news, Amazon.com (NASDAQ:AMZN) has been the focus of several analyst firms. UBS analyst Stephen Ju raised the company’s stock price target to $275 while maintaining a Buy rating. Similarly, Bernstein analysts, led by Nikhil Devnani, increased their price target on Amazon shares to $280, attributing this adjustment to Amazon’s strong third-quarter performance and a successful Re:Invent event. JMP Securities also upheld a Market Outperform rating on Amazon, maintaining a steady price target of $285.00.

Amazon’s ad spend on Elon Musk’s social media platform X has reportedly increased, according to the Wall Street Journal. This comes after a significant hiatus due to concerns related to hate speech. In other developments, Amazon is facing a lawsuit over alleged covert tracking of consumer movements via mobile devices using Amazon Ads SDK. Amazon also entered into a transaction agreement with Ranpak Holdings (NYSE:PACK) Corp., which includes the issuance of a warrant for Amazon to acquire up to 18,716,456 shares of Ranpak’s common stock.

The UK’s Competition and Markets Authority is considering an investigation into Amazon Web Services over concerns of reduced competition in the UK cloud services market. These recent developments, along with upcoming earnings reports and analyst forecasts, present a dynamic landscape for investors navigating Amazon’s current market position.

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