Analysts: United Parcel Service, Inc. (UPS) Has Over 6.38% Upside Potential

United Parcel Service, Inc. (NYSE:UPS) is rated as Neutral by analysts at BofA/Merrill. The firm was pushed by the stock performance to change their PT view from $116 to $112 on February 01. Analysts at Standpoint Research, started covering the stock on December 26 with a Buy rating. The stock lost favor of Citigroup analysts who expressed their lack of confidence in it using a downgrade from Buy to Neutral on November 02. BofA/Merrill analysts came out with bearish views on October 25 when the call was made. They think the stock is now Neutral compared to to their prior call for Buy.

UPS stock rose 0.02% in recent trade and currently has a stock-market value of $95.54B. The shares finished at $110.88, after trading as low as $110.08 earlier in the session. It hit an intraday high Thursday at $111.18. Trading activity significantly weakened as the volume at ready counter decreased to 2,539,575 shares versus 3,047,890 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 3,469,364 shares. The stock is now 23.35% above against its bear-market low of $89.89 on December 24, 2018. It has retreated -12.82% since it’s 52-week high of $125.09 reached in September. Now the market price is up 1.42% on the year and up 13.69% YTD.

Wall Street’s most bullish United Parcel Service, Inc. (NYSE:UPS) analysts are predicting the share price to blow past $145 per share during the next 12 months. The current median share price forecast by them is $116.5, suggesting that the stock could increase 5.07% in that time frame. The average price target of $117.95 calls for a nearly 6.38% increase in the stock price.

United Parcel Service, Inc. (UPS)’s 50 day simple moving average (SMA 50) price is $105.35 and its 200-day simple moving average (SMA 200) price is $111.29. The company’s stock currently has a total float of 695.92M shares. Its weekly volatility is hovering around 1.56% and felt 1.66% volatility in price over a month. On the upside, the share price will test short term resistance at around $111.35. On a downside, the stock is likely to find some support, which begins at $110.25. The failure to get near-term support could push it to $109.61.

When looking at valuations, United Parcel Service, Inc. (UPS) has a cheap P/E of 20.13x as compared to industry average of 44.14x. Moreover, it trades for 13.45 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 31.77x price/book and 1.33x price/sales. Compared to others, United Parcel Service, Inc. is in a different league with regards to profitability, having net margins of 6.7%. To put some perspective around this, the industry’s average net margin is 2.52%. UPS’s ROE is 195.7%, which is also considerably better than the industry’s ROE of 14.04%. It’s also very liquid in the near term, with a current ratio of 1.2. The stock has a debt/capital of 7.53.

Shares of UPS have gained 9.6% since the company’s most recent earnings report. Over the past 12 fiscal quarters, United Parcel Service, Inc. (NYSE:UPS) has topped consensus earnings estimates in 9 quarters (75%), missed earnings in 1 quarters (8%), whereas at 2 occasion EPS met analyst expectations. UPS last reported earnings that exceeded expectations. The company raked in $1.94 per share, -3.96% change on the same period last year. That was better than consensus for $1.9. Revenue for the recent quarter stood at $19.85 billion, up 5% on last year and below the $19.93 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $17.51 billion to $18.16 billion, which should be compared with $17.28 billion generated last year. EPS is seen in a range of $1.4 to $1.54, against the $1.67 reported a year ago.