UPS Stock Risk & Deep Value Analysis
United Parcel Service Inc
Industrials • Integrated Freight & Logistics
DVR Score
out of 10
What You Need to Know About UPS Stock
We analyzed United Parcel Service Inc using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran UPS through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Moderate. Here's what we found.
UPS Risk Analysis & Red Flags
What Could Go Wrong
Continued economic deceleration or a renewed slowdown in global e-commerce could exacerbate current volume and revenue declines, preventing UPS from achieving its reaffirmed FY2026 operating margin targets and leading to further EPS contraction.
Risk Matrix
Overall
Moderate
Financial
Low
Market
Medium
Competitive
High
Execution
Medium
Regulatory
Medium
Red Flags
- ⚠
Declining YoY revenue (-1.6%), operating profit (-23.9%), and net income (-27.2%) in Q1 2026.
- ⚠
High sensitivity to macroeconomic cycles and consumer spending trends.
- ⚠
Intense competitive pressures from well-funded rivals like Amazon Logistics.
Upcoming Risk Events
- 📅
Global economic slowdown impacting shipping volumes
- 📅
Intensified competition from FedEx, Amazon Logistics, and regional carriers
- 📅
Labor disputes or increased unionization costs
When to Reconsider
- 🚪
Exit if quarterly revenue declines for two consecutive quarters.
- 🚪
Sell if adjusted operating margin falls consistently below 8% for two quarters.
- 🚪
Significant negative revision to full-year guidance.
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What Does United Parcel Service Inc (UPS) Do?
Market Cap
$85.68B
Sector
Industrials
Industry
Integrated Freight & Logistics
Employees
490,000
United Parcel Service, Inc., a package delivery and logistics provider, offers transportation and delivery services. It operates through two segments, U.S. Domestic Package and International Package. The U.S. Domestic Package segment offers time-definite delivery services for express letters, documents, packages and palletized freight through air and ground services in the United States. The International Package segment provides small package operations in Europe, the Indian sub-continent, the Middle East and Africa, Canada and Latin America, and Asia. The company offers a range of guaranteed day- and time-definite international shipping services; day-definite services; cross-border ground package delivery; contract-only, e-commerce solutions for non-urgent, and cross-border shipments; and international service for urgent and palletized shipments. It also provides international air and ocean freight forwarding, contract logistics, custom brokerage and insurance, mail services, healthcare logistics, distribution, and post-sales services. United Parcel Service, Inc. was founded in 1907 and is headquartered in Atlanta, Georgia.
Visit United Parcel Service Inc WebsiteInvestment Thesis
UPS is a robust, dividend-paying income stock offering stability and essential exposure to global trade and e-commerce. Its ongoing efforts to optimize its network, diversify revenue streams away from lower-margin customers, and leverage its extensive infrastructure position it as a resilient holding, though not a candidate for aggressive growth portfolios due to its mature business model.
Is UPS Stock Undervalued?
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UPS Price Targets & Strategy
12-Month Target
$98.00
Bull Case
$120.00
Bear Case
$70.00
Valuation Basis
Based on 13x forward P/E on estimated FY2026 EPS of $7.50 (adjusted from Q1 2026 performance and reaffirmed FY guidance).
Entry Strategy
Dollar-cost average below $100, targeting dips near $95 (potential support zone).
Exit Strategy
Take 50% profit at $110, consider full exit if price drops below $85 (key long-term support).
Portfolio Allocation
2% for conservative income-focused portfolios, negligible for growth-oriented portfolios.
Price Targets & Strategy
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Is UPS Financially Healthy?
Valuation
P/E Ratio
16.32
Profitability
Gross Margin
83.06%
Operating Margin
8.46%
Net Margin
5.94%
Return on Equity
33.03%
Revenue Growth
-2.85%
EPS
$6.18
Balance Sheet
Current Ratio
1.22
Quick Ratio
1.22
Debt/Equity
1.49
Cash Flow
Free Cash Flow
$4.03B
Other
Beta (Volatility)
1.05
Dividend Yield
6.56%
Does UPS Have a Competitive Moat?
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🏰 Wide
Moat Trend
Stable
Moat Sources
4 Identified
UPS's moat is extremely durable, built on a vast, capital-intensive global network that is nearly impossible for new entrants to replicate. Its established brand and integrated services create high switching costs for many corporate clients.
Moat Erosion Risks
- •Accelerated growth of in-house logistics capabilities by major customers (e.g., Amazon)
- •Increased labor costs and potential union-related disruptions
- •Technological advancements by competitors (e.g., drone delivery scaling, autonomous vehicles)
UPS Competitive Moat Analysis
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UPS Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral (due to lack of specific data, general sentiment for mature large-caps tends to be stable).
Institutional Sentiment
Neutral (no recent upgrades/downgrades or price targets provided in research).
Insider Activity (Form 4)
No Form 4 insider trading filings reported in last 90 days (since ~Feb 12, 2026). No CEO/CFO activity flagged.
Options Flow
Normal options activity (no specific unusual activity data available in research).
Earnings Intelligence
Next Earnings
2026-07-28 (estimated)
Surprise Probability
Medium
Historical Earnings Pattern
As a mature company, UPS stock typically exhibits modest price reactions to earnings unless guidance significantly deviates from expectations or major strategic shifts are announced.
Key Metrics to Watch
Competitive Position
Top Competitor
FDX
Market Share Trend
Stable, but potentially facing slight shifts due to strategic decisions like reducing Amazon volume, offset by growth in other segments.
Valuation vs Peers
Likely trading broadly in line with or at a slight premium to peers like FedEx, reflecting its stable dividend and strong market position.
Competitive Advantages
- •Extensive global logistics network and infrastructure
- •Strong brand recognition and customer loyalty
- •Operational efficiency and scale
Market Intelligence
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What Could Drive UPS Stock Higher?
Near-Term (0-6 months)
- •Q2 2026 Earnings (estimated July 28, 2026)
- •Progress on Amazon volume reduction strategy and network optimization
Medium-Term (6-18 months)
- •Expansion of high-margin Supply Chain Solutions segment
- •Economic recovery driving increased package volumes
Long-Term (18+ months)
- •Continued global e-commerce growth driving demand for logistics
- •Further automation and technological advancements in logistics operations
Catalysts & Growth Drivers
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What's the Bull Case for UPS?
- ✓
Acceleration in U.S. Domestic package volume growth (YoY)
- ✓
Consistent expansion of adjusted operating margins above reaffirmed FY2026 targets
- ✓
Successful integration and growth of Supply Chain Solutions segment.
Bull Case Analysis
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Competing with UPS
See how United Parcel Service Inc compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
United Parcel Service Inc UPS | $85.7B | 0.1 | 16.3 | $88.3B | 5.9% | -2.9% | |
Caterpillar Inc CAT | $407.0B | 0.1 | 45.8 | $64.8B | 13.1% | 4.3% | Compare → |
FedEx Corp FDX | $90.5B | 1.5 | 20.2 | $91.9B | 4.9% | 4.7% | Compare → |
General Electric Co GE | $299.7B | 0.5 | 34.7 | $41.1B | 17.9% | 21.8% | Compare → |
Honeywell International Inc HON | $134.7B | 1.5 | 29.8 | $37.4B | 11.4% | 3.6% | Compare → |
RTX Corp RTX | — | 0.1 | 5.0 | $88.6B | 7.6% | 0.0% | Compare → |
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How United Parcel Service Inc Makes Money
United Parcel Service (UPS) is a global leader in package delivery and logistics, serving businesses and individual consumers across more than 220 countries and territories. The company leverages an extensive network of ground vehicles, aircraft, and advanced technology to transport packages, freight, and provide supply chain management solutions, essentially connecting the world's commerce. They generate revenue by charging for the transportation and delivery of goods, as well as providing value-added services like warehousing and customs brokerage.
Read Full Business Model BreakdownFAQ
What is the DVR Score for United Parcel Service Inc (UPS)?
As of May 12, 2026, United Parcel Service Inc has a DVR Score of 0.1 out of 10, placing it in the "Distressed" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of United Parcel Service Inc?
United Parcel Service Inc's market capitalization is approximately $85.7B. The company operates in the Industrials sector within the Integrated Freight & Logistics industry.
What ticker symbol does United Parcel Service Inc use?
UPS is the ticker symbol for United Parcel Service Inc. The company trades on the NYQ.
What is the risk level for UPS stock?
Our analysis rates United Parcel Service Inc's overall risk as Moderate. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of UPS?
United Parcel Service Inc currently has a price-to-earnings (P/E) ratio of 16.3. This is in line with broader market averages.
Does United Parcel Service Inc pay a dividend?
Yes, United Parcel Service Inc pays a dividend with a current yield of approximately 6.56%.
Is United Parcel Service Inc's revenue growing?
United Parcel Service Inc has reported revenue growth of -2.9%. Revenue has been declining, which warrants closer examination.
Is UPS stock profitable?
United Parcel Service Inc has a profit margin of 5.9%. The company is profitable but margins are modest.
How often is the UPS DVR analysis updated?
Our AI-powered analysis of United Parcel Service Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on May 12, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for UPS (United Parcel Service Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.