United Parcel Service (UPS) Gains As Market Dips: What You Should Know
United Parcel Service (UPS) closed at $161.06 in the latest trading session, marking a +0.88% move from the prior day. This move outpaced the S&P 500's daily loss of 1.16%. At the same time, the Dow lost 1.84%, and the tech-heavy Nasdaq lost 0.13%.
Coming into today, shares of the package delivery service had gained 0.07% in the past month. In that same time, the Transportation sector gained 4.67%, while the S&P 500 lost 1.96%.
Investors will be hoping for strength from UPS as it approaches its next earnings release. In that report, analysts expect UPS to post earnings of $1.74 per share. This would mark a year-over-year decline of 15.94%. Meanwhile, our latest consensus estimate is calling for revenue of $19.95 billion, up 8.93% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $6.91 per share and revenue of $80.35 billion, which would represent changes of -8.23% and +8.45%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for UPS. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.09% higher. UPS is currently sporting a Zacks Rank of #2 (Buy).
Digging into valuation, UPS currently has a Forward P/E ratio of 23.11. This represents a premium compared to its industry's average Forward P/E of 16.62.
Also, we should mention that UPS has a PEG ratio of 2.98. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Transportation - Air Freight and Cargo stocks are, on average, holding a PEG ratio of 2.19 based on yesterday's closing prices.
The Transportation - Air Freight and Cargo industry is part of the Transportation sector. This industry currently has a Zacks Industry Rank of 6, which puts it in the top 3% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.