United Parcel Services provides package delivery, transportation, logistics, and financial services in the United States and internationally. It operates in three segments: U.S. Domestic Package, International Package, and Supply Chain & Freight. The company was founded in 1907 and is based in Atlanta, Georgia.
UPS Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for UPS, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that United Parcel Service Inc ranked in the 43th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. As for the metrics that stood out in our discounted cash flow analysis of United Parcel Service Inc, consider:
The company has produced more trailing twelve month cash flow than 98.76% of its sector Industrials.
United Parcel Service Inc's weighted average cost of capital (WACC) is 8%; for context, that number is higher than merely 19.65% of tickers in our DCF set.
UPS's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 3%; for context, that number is higher than merely 19.65% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
CW, IAA, RXN, ALLE, and HWCC can be thought of as valuation peers to UPS, in the sense that they are in the Industrials sector and have a similar price forecast based on DCF valuation.
Moody's Investors Service ("Moody's") said that United Parcel Service Inc.'s sale of UPS Freight is credit positive but does not affect the company's ratings, including the A2 senior unsecured rating and the P-1 short term rating, nor the negative outlook. United Parcel Service, Inc., based in Atlanta, Georgia, is the largest package delivery company in the world and a provider of global supply chain management solutions. This publication does not announce a credit rating action.
United Parcel Service has agreed to sell its freight business to TFI International in a deal worth $800 million. Shares advanced almost 3% in Monday’s afternoon trading. UPS (UPS) said that the decision to divest its freight business was taken following the evaluation of its business portfolio and its strategic positioning of “better not bigger.” The logistics giant expects to incur a pre-tax, non-cash impairment charge of $500 million related to the UPS Freight sale on its consolidated income statement for the year ended December 31, 2020. The transaction is anticipated to close in the second quarter of this year. Additionally, UPS has also entered into a separate agreement with TFI that will allow UPS Freight to continue to deploy UPS’ domestic package network for five years. “We’re e...
FedEx Corp. said Tuesday that Henry Maier, chief executive of FedEx Ground, will retire effective July 31, after about eight years in the role and about 35 years with the package delivery company. He will be succeeded by John Smith, who is currently CEO of FedEx Freight, after joining FedEx in 2000. Lance Moll has been named to succeed Smith as CEO of FedEx Freight. FedEx's stock, which edged up 0.2% in premarket trading, has declined 8.7% over the past three months, while shares of rival United Parcel Service Inc. have slipped 3.7% over the same time and the S&P 500 has gained 13.4%.