Service, Inc. (NYSE: UPS) is currently mired in multiple
headwinds, which have made it an unimpressive investment option.
The Consensus Estimate for current-quarter earnings has been revised 15.4%
downward over the past 60 days. For the current year, the consensus mark for
earnings has moved 9.5% south in the same time frame. The unfavorable estimate
revisions indicate brokers’ lack of confidence in the stock.
The UPS stock has lost 1.8% year to date against its industry’s 12.5%
Why the UPS Weekly
Options Trade was Originally Executed!
Parcel Service, Inc. (NYSE: UPS), the world's biggest package delivery
company, posted mixed second-quarter results on Tuesday, August 08, beating on
earnings but falling short on revenue amid a pullback in deliveries and labor
posted an operating profit of $2.8 billion, or $2.54 per adjusted share.
Earnings per share came in above Wall Street estimates, but well below the
$3.29 figure in the same quarter last year. Revenue of $22.1 billion fell short
of expectations of $23 billion, and was down 10.9% from $24.8 billion in the
deliveries and package volumes were partly to blame, as consumers shopped less
online and ordered fewer products amid a pullback in discretionary spending.
Domestic revenue fell 6.9% to $14.4 billion, from $15.46 billion in the year-ago
quarter. It's a divergence from seasonal trends, as revenue has historically
tended to rise in the fiscal second quarter.
shares were down as much as 3% in early trading Tuesday before recovering
losses. They're up just under 4% so far this year.
The UPS Weekly
Options Trade Explained.....
** OPTION TRADE: Buy UPS
SEP 01 2023 175.000 PUTS - price at last close was $2.14 - adjust accordingly.
Obviously the results will vary from trader to trader
depending on entry cost and exit price that was undertaken.
Entered the UPS Weekly Options (PUT) Trade on Wednesday, August 09, 2023, for $1.93.
Sold the UPS weekly options contracts on Tuesday, August 22, 2023 for $8.61; a potential profit of 346%.
Don’t miss out on further trades – become a
Further Catalysts for the UPS Weekly Options Trade…..
UPS has been involved in a series of negotiations with the International
Brotherhood of Teamsters, a labor union representing its workers. The two
parties reached an agreement last month, which secured higher wages, better
working conditions, and other workplace improvements for up to 340,000 UPS
The company lowered its revenue and profit margin forecasts as a result.
Consolidated revenue for 2023 is now forecast at $93 billion, with a projected
operating margin of 11.8%, below the current 13.2%.
"UPS is updating its full-year 2023 consolidated revenue and
adjusted operating margin targets primarily to reflect the volume impact from
labor negotiations and the costs associated with the tentative agreement
reached with the International Brotherhood of Teamsters on July 25, 2023,"
the company said.
daily volume in UPS’ domestic segment, its largest, dropped 9.9% in the second
quarter, compared to the 2022 period. There was more parcel diversion in July
than the company expected, though the losses weren’t as severe as in June. UPS
said it expects that by the end of 2023 it will return average daily volumes to
even with December 2022 levels. For the second half of 2023, it expects average
daily volumes to be down by single-digit percentages year over year.
the company, the diverted business was split evenly, with one-third each going
to FedEx Corp., the U.S. Postal Service and regional delivery carriers.
average daily volume in the quarter totaled 17.4 million parcels, according to
ShipMatrix, a consultancy. Domestic and international volume combined totaled
20.9 million daily parcels, the firm said.
expects wages and benefits to rise by 3.3%, compounded annually, over the life
of the contract. The bulk of the increases will occur in the first year,
because the Teamsters wanted a front-loaded bump to offset current inflation
levels, UPS said. The first-year increases, which will average $2.75 an hour
for full- and part-timers, were higher than planned, UPS said. The fifth year
will be the second-highest-cost year, with smaller increases in years two through
Chappell of Evercore ISI, who said UPS’ formidable cost-management efforts and
expected price increases will not offset the headwinds over the next few
quarters from the higher labor costs. He has a $185-a-share price target, down
from $187. After a rocky start to the day, UPS shares recovered much of their
early losses. It closed at it traded at $180.59 a share, down $1.56 per share.
to the issued ratings of 21 analysts in the last year, the consensus rating for
United Parcel Service stock is Hold based on the current 3 sell ratings, 10
hold ratings, 7 buy ratings and 1 strong buy rating for UPS. The average
twelve-month price prediction for United Parcel Service is $189.04 with a high
price target of $225.00 and a low price target of $100.00.
United Parcel Service shares traded
down $1.90 during trading hours on Tuesday, hitting $180.25. 4,220,666 shares
of the company were exchanged, compared to its average volume of 3,333,290. The
company has a market cap of $154.81 billion, a price-to-earnings ratio of
14.24, and a P/E/G ratio of 1.70 and a beta of 1.07. United Parcel Service, Inc.
has a fifty-two week low of $154.87 and a fifty-two week high of $209.39. The
company has a quick ratio of 1.34, a current ratio of 1.34 and a debt-to-equity
ratio of 0.99. The firm’s fifty day moving average is $178.57 and its 200 day
moving average is $181.29.