United Parcel Service, Inc. UPS
UPS remains a hold as FY2025 fundamentals continue to deteriorate—EPS fell to $6.56 from $13.20 in FY2022, operating margin compressed to 8.87% from 12.96%, and total debt climbed to $32.3B against declining equity of $16.2B—yet the stock trades at a 33.6% P/E discount to the peer median (19.1x vs. 28.7x) and smart money has inflected positive (score 0.062 as of Q2 2026, up from negative readings through most of 2024–2025). The strategic decision to walk away from Amazon as largest customer and target $3B in 2026 network savings could re-rate margins, but execution risk is high and technicals are weak with the stock at $102.86, below both its 50-day ($108.53) and 200-day ($104.35) moving averages and a bearish MACD histogram of -0.40.
The setup is a turnaround-in-progress at a reasonable valuation, not yet enough to commit capital.
What could go wrong
- Amazon revenue gap. Walking away from the largest customer removes high-volume revenue before replacement volumes materialize, risking further revenue decline beyond the -2.46% YoY drop already seen in FY2025.
- Dividend sustainability. FY2025 free cash flow of $4.77B is down sharply from $9.34B in FY2022, while total debt has risen to $32.3B, pressuring the ability to fund dividends and deleverage simultaneously.
- Margin compression persistence. Gross margin has declined every year from 20.07% (FY2022) to 18.08% (FY2025); if the $3B network savings target is not achieved, operating margin at 8.87% could compress further.
- Balance sheet deterioration. Total debt rose from $23.5B (FY2022) to $32.3B (FY2025) while stockholders' equity fell from $19.8B to $16.2B, increasing leverage at a time of declining earnings.
What would change my mind
Where this comes from: FMP annual fundamentals · derived_metrics · FMP annual fundamentals · peer_relative composite. Orin's read on UPS; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All UPS filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $5.2B | 0.1% of fund |
| Brasada Capital Management | $4.6B | 0.8% of fund |
| State Street | $3.6B | 0.1% of fund |
| Fmr | $3.5B | 0.2% of fund |
| Charles Schwab Investment Management | $2.7B | 0.4% of fund |
| Geode Capital Management | $1.9B | 0.1% of fund |
119 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 126 Form 4 filings, net $76.6M. Of the 50 on hand, none was an open-market trade— the rest are grants, option exercises and tax withholding.
Ask Orin about UPS
Orin answers questions about UPS from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 17.8× | 15.1× | 44.5× |
| EV/EBITDA | 9.9× | 10.0× | — |
| P/S | 0.91× | 1.49× | — |
| P/B | 5.4× | 7.7× | — |
Its P/E sits 60th percentile of its own last 5 years (+0.56σ from its own mean).
5.6%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $4.8B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$119
$76 – $132 · +24% against today's price
- 21 buy or overweight
- 20 hold
- 4 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| UPSUnited Parcel Service, Inc. | $81B | 17.8× | 9.9× | 16.6% | 5.1% | 29% |
| EMREmerson Electric Co. | $87B | 33.7× | 19.1× | 53.2% | 13.8% | 13% |
| FDXFedEx Corporation | $69B | 15.9× | 9.3× | 22.9% | 4.7% | 15% |
| GDGeneral Dynamics Corporation | $93B | 20.6× | 15.2× | 15.4% | 8.2% | 17% |
| HWMHowmet Aerospace Inc. | $92B | 49.0× | 34.7× | 34.4% | 20.5% | 34% |
| ITWIllinois Tool Works Inc. | $79B | 24.7× | 18.9× | 44.2% | 19.4% | 102% |
| JCIJohnson Controls International plc | $88B | 25.3× | 27.0× | 36.7% | 14.3% | 27% |
| MMM3M Company | $88B | 30.1× | 17.9× | 39.4% | 11.9% | 77% |
| NOCNorthrop Grumman Corporation | $73B | 16.3× | 11.7× | 20.1% | 10.5% | 27% |
| TDGTransDigm Group Incorporated | $62B | 33.5× | 18.6× | 59.6% | 21.3% | -21% |
| WMWaste Management, Inc. | $83B | 29.3× | 14.1× | 35.0% | 11.1% | 29% |
The median is of the 10 peers listed above and nothing else — check it against the column. This company trades 34.9% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $178 | $103.98 · +72% | 2026-06-10 |
| Levered DCF | $120 | $103.98 · +15% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.