UPS CEO Defends Amazon Glide Down Decision, But Wall Street's Skeptical: Retail’s Busy Spotting Bottom-Fishing Opportunities

Shares of United Parcel Service Inc (UPS) recorded their worst session ever on Thursday, plunging over 14% to hit levels not seen since July 2020, after the company’s fourth-quarter revenue and guidance fell short of Wall Street estimates while a reduction in Amazon deliveries disappointed investors.

UPS CEO Carol Tome said in a Bloomberg interview that although Amazon is their largest customer, it isn’t the most profitable.

“Our contract was coming up for renewal this year and it gave us an opportunity to step back and assess how we wanted to drive the relationship going forward. We considered a number of options and alternatives and landed on this, which is an accelerated glide down of their revenue, taking it down more than 50% BY June of 2026,” she said.

Tome drew attention to UPS’ 2025 profit guidance for its U.S. business and highlighted that with Amazon’s glide down, its average daily value will drop around 8.5%, but its revenue will drop only about 2%. More importantly, the firm’s profits in the U.S. will grow by nearly 15%, she said.

“We will grow profit dollars by making this change,” Tome said.

However, Wall Street has not been convinced yet. According to TheFly, Morgan Stanley noted that UPS looks set to lose significant volume over the next year as its largest customer, Amazon, significantly accelerates insourcing.

The brokerage also said that in addition to SurePost—UPS’ economy service for non-urgent, residential shipments of low value—being 100% insourced, these more than offset the cost actions announced, which could be "a significant drag on normalized/2026 EPS for UPS.”

Morgan Stanley has lowered its price target on UPS to $82 from $100 while keeping an ‘Underweight’ rating on the shares.

Baird believes the company’s Amazon decision introduces a new multi-year challenge and a higher probability that the relationship will ultimately unwind altogether.

Barclays noted that the company's meaningfully lower volumes from an accelerated Amazon "glide down" are likely to pressure its network density, suggesting margin headwinds could persist through next year.

Despite the general skepticism prevailing on Wall Street about UPS’ Amazon glide-down decision, retail investors on Stocktwits appear to be positive on the stock, with the sentiment meter trending in the ‘bullish’ territory.

While some retail users have questioned management’s decision to reduce Amazon deliveries, others believe it's a step in the right direction.

A few are evaluating bottom-fishing opportunities following the stock’s historic single-day slide on Thursday.

UPS shares traded marginally in the green in Friday’s pre-market session, but they are down over 7% year-to-date and have lost over 19% in the past year.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<