UPS Is Uniquely Positioned To Capitalize On E-Commerce Tailwinds & Drive Revenue Growth, Analyst Says - United Parcel Service (NYSE:UPS)

Raymond James analyst Patrick Tyler reiterated a Strong Buy rating on the shares of United Parcel Service Inc UPS and lowered the price target from $210 to $207.
The company reported 4Q22 adj. EPS of $3.62, beating the estimates, driven by yield/margin initiatives.
Revenue and Adj. EBIT were both slightly below Street expectations, though company-wide operating margins of 14.1% remained solid.
The analyst said the Domestic segment continues to outperform despite the uncertain volume environment as margins came in at 12.8%.
From where management stands today, it is broadly expecting lower volumes and slightly weaker margins in 2023, said the analyst.
While the volume side of the equation is relatively outside its control, management remains focused on controlling the controllable, which stems from productivity and mix initiatives, the analyst remarked.
On productivity, UPS is accelerating its investments into its smart package/smart facility initiative, which is now expected to be completed at the remaining 900 facilities by the end of the year, enhancing productivity, said the analyst.
With consternation around the upcoming labor negotiations beginning to swirl, management is confident it can create a win, win, win scenario for UPS, its employees, and the Teamsters, the analyst said.
As the domestic leader in the evolving parcel arena, the analyst continues to believe that UPS is uniquely positioned to capitalize on e-commerce tailwinds and is set to drive continued revenue growth.
Price Action: UPS shares are trading lower by 1.74% at $182.01 on the last check Wednesday.

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