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Investing.com - Oppenheimer lowered its price target on UPS (NYSE:UPS) to $100 from $114 on Wednesday while maintaining an Outperform rating following the company’s second-quarter earnings report. The stock, currently trading at $90.84, is near its 52-week low of $90.55, with InvestingPro data showing technical indicators suggesting oversold conditions.
UPS slightly outperformed on revenue for the quarter, but fell short of expectations on adjusted operating income, margin, and earnings per share. While the company declined to provide a full-year 2025 outlook citing macroeconomic uncertainty, it maintains a solid P/E ratio of 13.4x and offers an attractive 7.22% dividend yield. InvestingPro analysis suggests the stock is currently trading below its Fair Value, presenting a potential opportunity for value investors.
The logistics giant reported significant challenges in its China-US shipping lane, which declined 35% in May and June. UPS also experienced margin pressure due to light Ground Saver volume after in-sourcing its SurePost service.
UPS continues to reshape its volume mix, including the planned reduction of Amazon (NASDAQ:AMZN) business, while implementing cost-cutting measures through its "Efficiency Reimagined" initiative. The company is also undertaking what it describes as the largest network reconfiguration in its US history.
Oppenheimer noted that UPS had only removed approximately $1 billion of a planned $3.5 billion in 2025 expenses by mid-year, though the company expects to catch up in the second half. The research firm adjusted its 2025 earnings per share estimate to $6.20 (down 20% year-over-year) from $7.14, and its 2026 estimate to $6.65 (up 7% year-over-year) from $8.02. Despite near-term challenges, InvestingPro data shows UPS maintains moderate debt levels and has consistently paid dividends for 27 consecutive years, demonstrating long-term financial stability. For deeper insights into UPS’s financial health and growth prospects, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, United Parcel Service Inc. (UPS) reported its second-quarter earnings for 2025, revealing a mixed financial performance. The company posted a diluted earnings per share (EPS) of $1.55, slightly below the forecast of $1.57, but exceeded revenue expectations with $21.2 billion against an anticipated $20.8 billion. Despite this revenue outperformance, several financial analysts have adjusted their outlooks on UPS. Morgan Stanley (NYSE:MS) lowered its price target from $80.00 to $75.00, citing a "modest miss versus lowered expectations." TD Cowen also reduced its price target to $101.00 from $107.00, noting UPS’s withdrawal of financial guidance due to global trade uncertainties.
Additionally, BofA Securities downgraded UPS from Buy to Neutral, reducing its price target to $98.00 from $115.00, due to concerns about small- to medium-sized business volume and slower-than-expected cost reductions. Evercore ISI adjusted its price target to $97.00 from $103.00, despite UPS’s revenue exceeding expectations, due to an overall EBIT shortfall. These developments reflect ongoing concerns among analysts regarding UPS’s financial performance and market conditions.
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