United Parcel Service (UPS) Stock Sinks As Market Gains: What You Should Know
United Parcel Service (UPS) closed at $171.90 in the latest trading session, marking a -0.63% move from the prior day. This change lagged the S&P 500's 0.35% gain on the day. At the same time, the Dow lost 0.1%, and the tech-heavy Nasdaq gained 0.37%.
Coming into today, shares of the package delivery service had gained 7.84% in the past month. In that same time, the Transportation sector gained 3.81%, while the S&P 500 gained 4.32%.
UPS will be looking to display strength as it nears its next earnings release, which is expected to be October 28, 2020. The company is expected to report EPS of $1.82, down 12.08% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $20.08 billion, up 9.62% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7 per share and revenue of $80.77 billion. These totals would mark changes of -7.04% and +9.01%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for UPS. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 1.33% higher within the past month. UPS currently has a Zacks Rank of #2 (Buy).
In terms of valuation, UPS is currently trading at a Forward P/E ratio of 24.71. This represents a premium compared to its industry's average Forward P/E of 18.49.
It is also worth noting that UPS currently has a PEG ratio of 3.13. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Transportation - Air Freight and Cargo industry currently had an average PEG ratio of 2.31 as of yesterday's close.
The Transportation - Air Freight and Cargo industry is part of the Transportation sector. This group has a Zacks Industry Rank of 6, putting it in the top 3% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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United Parcel Service, Inc. (UPS): Free Stock Analysis Report
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