UPS changes
Pick any two versions below to diff them.
- Price
- $110.96
- Discount category
- Close to intrinsic value
- Next earnings
- 2027-01-26
- Next earnings is estimate
- Yes
- Company name
- United Parcel Service
- Sector
- Parcel delivery & logistics
- About
- UPS delivers packages and freight and provides logistics services in more than 200 countries and territories. It reports U.S. Domestic and International segments and Supply Chain Solutions, which includes forwarding, logistics and healthcare logistics. In the fourth quarter of 2025, it bought Andlauer Healthcare Group. It has about 460,000 employees, and its 2025 revenue was $88.7 billion. In Q2 2026, it completed a planned reduction of volume from its largest customer, Amazon, by more than 50% from 2024 levels.
- Thesis
- The market doubts that UPS can grow profit after it chose to carry less volume. It cut volume from its largest customer by more than half from 2024 levels, and U.S. air and ground average daily volume fell again in Q3 2026. Costs rose, because UPS now pays USPS to deliver its Ground Saver product and leases aircraft after it retired its MD-11 fleet. In Q3 2026, revenue rose 6.7% to $22.9 billion, and non-GAAP adjusted diluted EPS was $1.69. UPS raised its 2026 outlook to adjusted EPS of about $7.28 and adjusted free cash flow of about $6.1 billion. Dividends of about $5.4 billion use most of that cash, and UPS bought back no shares in 2026. For the gap to close, three things must be true. U.S. Domestic revenue per piece must keep rising faster than cost per piece. The adjusted operating margin must keep rising from 9.0% in Q3 2026. Free cash flow must cover the dividend with room left over. The Q4 2026 report with 2027 guidance, expected in late January 2027, gives the next test. If these conditions hold, the gap can close within one to two years.
- Risks
- Volume is falling while some costs rise. U.S. cost per piece rose 10.2% in the first nine months of 2026, because of fees paid to USPS for Ground Saver, fuel, wage increases and lower volume. If revenue per piece stops rising faster, margins fall. UPS expects dividend payments of about $5.4 billion and pension contributions of $1.3 billion in 2026, against adjusted free cash flow of about $6.1 billion. A weaker year can leave the dividend without full cover from free cash flow. Trade policy and conflicts lower international volume. Changes in trade policy, including tariffs and de minimis exclusions, lowered U.S. import volume, and export volume fell 8.3% in Q3 2026, led by Europe, the Middle East and Africa. UPS retired its MD-11 fleet in the fourth quarter of 2025 and leases other aircraft to replace the capacity. Higher aircraft lease costs can reduce margins. Supply Chain Solutions is less profitable than the parcel business, and UPS recorded a goodwill impairment of $182 million in this group in Q3 2026.
- Balance sheet
- Cash: $6.8B Debt: $26.1B Net debt: $19.2B Debt due within 12 months: $957M At September 30, 2026, UPS had cash and cash equivalents of $6,837 million and no commercial paper outstanding. Long-term debt and finance leases were $25,121 million, and current maturities were $957 million, for a total of $26,078 million including finance leases. In August 2026, UPS agreed to sell $1.0 billion of 4.850% senior notes due 2031. It can borrow up to $10.0 billion under its U.S. commercial paper program and €5.0 billion under its European program. For 2026, it expects adjusted free cash flow of about $6.1 billion, capital expenditures of about $3.0 billion, dividend payments of about $5.4 billion and pension contributions of $1.3 billion. It bought back no shares in the first nine months of 2026 and had $1.3 billion left under its authorization. Total shareowners' equity was $15,026 million. As of 2026-09-30.
- Checkpoints
- Oct 27, 2026: Q3 2026 results. Passed. Watch: Revenue growth with a higher adjusted operating margin and a higher 2026 outlook pass; lower guidance fails. Outcome: Revenue rose 6.7% to $22.9 billion, the adjusted operating margin was 9.0% and UPS raised its 2026 adjusted EPS outlook to about $7.28. Jan 26, 2027 (estimate): Q4 2026 results and 2027 guidance. Pending. Watch: Q4 adjusted operating profit near $3.3 billion and 2027 guidance for higher adjusted EPS and free cash flow above the dividend pass; lower profit guidance or free cash flow below the dividend fail.
- Recent events
- 2026-11-04: The UPS board appointed Shannon Eisenhardt, Group Chief Financial Officer of Reckitt Benckiser, as a director and member of the Audit Committee. 2026-10-27: UPS reported Q3 2026 results. Revenue rose 6.7% to $22.9 billion. Diluted EPS was $1.37, and non-GAAP adjusted diluted EPS was $1.69. The non-GAAP adjusted operating margin was 9.0%. U.S. Domestic revenue per piece rose 6.1%. GAAP results include a goodwill impairment of $182 million in Supply Chain Solutions. UPS raised its 2026 outlook to revenue of about $92.6 billion, adjusted operating profit of about $8.75 billion, adjusted EPS of about $7.28 and adjusted free cash flow of about $6.1 billion. 2026-08-31: UPS said that Kate Gutmann, President of International, Healthcare and Supply Chain Solutions, will retire, and it appointed Wilfredo Ramos to lead these businesses. Nando Cesarone became Chief Global Operations Officer. 2026-08-10: UPS agreed to sell $1.0 billion of 4.850% senior notes due 2031. It planned to contribute $450 million of the notes to two of its pension trusts. 2026-07-28: UPS reported Q2 2026 results. Revenue was $22.8 billion, diluted EPS was $0.71 and non-GAAP adjusted diluted EPS was $1.76. GAAP results include after-tax transformation charges of $891 million, mostly for employee separations in the Driver Choice Program. UPS said that it completed the planned reduction of Amazon volume and raised its 2026 adjusted EPS guidance to about $7.22.