United Parcel Grapples With Varied Issues: Time to Dump?

A generic image of a line graph
Credit: Shutterstock photo

United Parcel Service Inc. UPS has gained a nominal 0.02% in the last one year, significantly underperforming the Zacks Transportation-Air Freight industry that recorded a 5.7% increase in the period.

United Parcel struggled in the recent holiday season due to higher costs associated with package deliveries. It expects 2017 adjusted earnings per share in the band of $5.80 to $6.10, which includes $400 million of pre-tax currency headwinds. Foreign currency-related issues are also expected to hurt 2017 results. The Zacks Consensus Estimate for first-quarter earnings has come down by 3 cents to $1.30 over the last 60 days. Higher costs are likely to hurt its first quarter 2017 results.

We note that rival FedEx FDX recently reported lower-than-expected earnings in third-quarter fiscal 2017 (ended Feb 28, 2017). Moreover, earnings declined 6.4% on a year-over-year basis. The bottom line was primarily hurt by significantly higher costs. Elevated expenses pertaining to package deliveries in the recent holiday season led to the year-over-year decline.

United Parcel's disappointing view for full-year 2017 is also a dampener. In view of such a gloomy scenario, we believe investors would do well to dump this Zacks Rank #4 (Sell) stock from their portfolios currently.

Zacks Rank & Key Picks

Better-ranked stocks in the broader transportation sector are Radiant Logistics RLGT and Aegean Marine Petroleum Network ANW . Both these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Shares of Radiant Logistics and Aegean Marine gained over 28% and 18%, respectively, on a year-to-date basis.

More Stock News: 8 Companies Verge on Apple-Like Run

Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.

A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Aegean Marine Petroleum Network Inc. (ANW): Free Stock Analysis Report

United Parcel Service, Inc. (UPS): Free Stock Analysis Report

FedEx Corporation (FDX): Free Stock Analysis Report

Radiant Logistics, Inc. (RLGT): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos


Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

Learn More