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Investing.com - UPS (NYSE:UPS), the $75 billion logistics giant, received a price target cut from Stifel on Wednesday, with the firm lowering its target to $120.00 from $124.00 while maintaining a Buy rating. According to InvestingPro analysis, the stock appears undervalued at current levels, trading near its 52-week low of $90.55.
The delivery giant reported adjusted second-quarter earnings per share of $1.55, slightly below the consensus estimate of $1.56 and Stifel’s expectation of $1.61. Following the results, UPS management withdrew its guidance for 2025, citing uncertainty in the market. Despite the challenges, the company maintains its position as a reliable dividend payer, offering a substantial 7.22% yield to shareholders.
Stifel highlighted several positives from the quarter, including a healthy yield environment in core priority products, strong growth in the International segment, and progress on network realignment and long-term efficiency initiatives. InvestingPro has identified 12 additional key insights about UPS, including its 27-year track record of consistent dividend payments.
The firm also noted challenges, including higher-than-anticipated costs related to the company’s pivot to Ground Saver service, slower personnel attrition savings from the Amazon (NASDAQ:AMZN) volume reduction, and uncertainty around peak season forecasting due to trade and policy concerns.
Despite these headwinds, Stifel remains constructive on UPS, stating that most of the negative factors are addressable or already being addressed, especially with expectations for an improving market environment.
In other recent news, UPS has faced several adjustments from analysts following its second-quarter earnings report. UBS lowered its price target for UPS to $118, maintaining a Buy rating, citing favorable execution in managing costs. Oppenheimer also reduced its price target to $100, maintaining an Outperform rating, as UPS slightly outperformed on revenue but fell short on adjusted operating income and earnings per share. Morgan Stanley (NYSE:MS) decreased its price target to $75, noting a modest miss versus lowered expectations and maintaining an Underweight rating. TD Cowen lowered its price target to $101, maintaining a Hold rating, and highlighted UPS’s decision to withdraw financial guidance due to global trade uncertainties.
Additionally, BofA Securities downgraded UPS from Buy to Neutral, setting a new price target of $98. This decision was influenced by concerns over a larger-than-expected deceleration in small- to medium-sized business volume and slower cost reduction efforts. These recent developments reflect a cautious outlook among analysts, emphasizing various challenges faced by UPS in the current economic climate.
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