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Last updated: January 29, 2024 at 11:09 PM ET
First Published: January 29, 2024 at 3:24 PM ET
United Parcel Service stock fell Monday as investors prepared for the delivery giant’s quarterly results. The results haven’t been very kind to investors recently.
The company is scheduled to release its fourth quarter earnings report around 6 a.m. ET on Tuesday. UPS stock has declined an average of 5.6% on the day of each of the past three reports, and has also fallen on the days of six of the past seven reports.
UPS…
United Parcel Service stock fell Monday as investors prepared for the delivery giant’s quarterly results. The results haven’t been very kind to investors recently.
The company is scheduled to release its fourth quarter earnings report around 6 a.m. ET on Tuesday. UPS stock has declined an average of 5.6% on the day of each of the past three reports, and has also fallen on the days of six of the past seven reports.
UPS stocks
UPS
It fell 0.8% on Monday. The company has risen 14% in the past three months, while rival FedEx’s stock has soared.
FDX
rose 4.7%, while the S&P 500 index SPX rose 18.3%.
Earnings aren’t the issue for UPS, as it has exceeded earnings per share estimates for the past 14 consecutive quarters.
However, sales have been below expectations for the past five quarters. The company has lowered its full-year earnings outlook in each of the past three quarters, and the previous quarter it gave a weaker-than-expected outlook. (See below for Wall Street’s current consensus forecast for the fourth quarter.)
read: Sales fell short of expectations again, and UPS stock plummeted to a three-year low.
Evercore ISI analyst Jonathan Chappell said there’s reason to be concerned that more failures and outlook downgrades could be on the way. Based on trend analysis, Chappell said, “UPS’s domestic U.S. revenues could suffer further downside. Additionally, China’s export slowdown is a headwind for his UPS’s international revenues.”
Recent labor-related headwinds may have allowed UPS’s rivals to profit at its own expense. Asked in December whether the company was able to maintain the market share gained during UPS’s tense labor negotiations, Brie Carrere, FedEx’s chief customer officer, said, “I am confident,” according to AlphaSense records. “It looks like you have one,” he said.
Please also read: UPS blames Teamsters’ “slow and noisy” talks for lost revenue and lowered outlook.
TD Cowen analyst Helane Becker said UPS had a tough fourth quarter due to labor issues, and the company was able to avoid moving shippers to other carriers and reduce the cost of new contracts with the Teamsters union. He said he had to find a way to cover the costs.
Becker reiterated his assessment of UPS stock’s market performance and kept his price target unchanged at $175.
Below are FactSet’s current average analyst forecasts for UPS for several key financial metrics, as well as estimates as of the end of the third quarter.
- FactSet consensus for earnings per share was $2.46, down from $3.62 in the year-ago period. The EPS consensus is down significantly from his $3.03 at the end of the third quarter.
- FactSet consensus for sales was $25.398 billion, down from $27.033 billion in the year-ago period and below the Sept. 29 consensus of $26.247 billion.
- U.S. domestic package revenue is expected to be $17.39 billion. In comparison, the consensus as of September 29 was $17.82 billion, compared to $18.25 billion reported a year ago.
- International sales are expected to fall to $4.64 billion from $4.95 billion last year. The consensus at the end of September was $4.7 billion.
- The FactSet consensus for 2024 revenue was $95.51 billion, down from $98 billion as of Sept. 29.
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