"We expect the international business to continue to improve, driven by secular e-commerce growth and the company's investments in Europe," said analysts at William Blair.
Potential disruption of UPS by Amazon.com, Inc. AMZN's shipping service appears to just be a minor distraction.
"We continue to believe it will be not much more than a blip on the radar due to the density required to make e-commerce deliveries profitable on a large scale and increasingly more e-commerce activity from other retailers," William Blair continued.
The investment bank is still expecting a "decent peak season," as UPS continues to improve its route density through several initiatives. The analysts highlighted four key catalysts for UPS moving forward:
- Peak looks healthy.
- Internal initiatives continue to drive better density and profitability.
- Growth opportunity in Europe.
- Amazon not expected to have a noticeable impact, at least in the near term.
"We recommend investors purchase shares at current levels and note the Company's 3 percent dividend yield for those seeking yield," said William Blair.
William Blair has an Outperform rating on UPS.
At time of writing, UPS was trading at $108.66, up 0.94 percent on the day.
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