Morningstar Analyst On Rumor Of Ackman Investment In UPS: 'We Don't Think There's Much Room To Improve Results Dramatically'

Speaking exclusively to Benzinga, Morningstar Director of Industrials Equity Research Keith Schoonmaker said while Pershing Square's investment in the Canadian Pacific Railway Limited CP was a “tremendous success,” he doesn't see the same opportunity for United Parcel Service, Inc. UPS.

Schoonmaker noted UPS as the highest margin integrated shipper, whereas Canadian Pacific was the only lagging railroad in need of a turnaround. He said there isn't much room for divestitures or financial engineering.

The Morningstar analyst said the company isn't critical of UPS' capital expenditures budget at about 4.5 percent of sales, which is considerable lower than that of FedEx Corporation FDX, about 8 percent of sales.

“From our perspective, it would seem harder to move the needle at UPS, compared to Pershing's most recent large transportation investment (Canadian Pacific),” he said.