UPS Stock On Track For Best Week Since May: United Parcel's Q3 Beat Wins Wall Street Praise, CEO Sees Strong Holiday Demand

Stronger earnings, analyst support, and rising holiday shipping demand lift optimism around UPS.

• Bank of America raised its UPS price target to $114, citing potential profit growth. 
• Goldman Sachs sees 27% upside on stronger domestic revenue per package and international margins. 
• UPS CEO Carol Tomé expects holiday online sales to grow 9% year over year.

United Parcel Service Inc. (UPS) stock is on track for its best week since May after the delivery giant topped third-quarter earnings expectations and lifted its outlook. Wall Street analysts raised price targets, while CEO Carol Tomé sees strong holiday demand, with average daily package volumes expected to rise 25% quarter-on-quarter.

United Parcel Service stock inched 0.5% lower overnight, ahead of Wednesday. The stock is up 4.9% so far this week and is heading for its fourth straight week of gains. 

Bank Of America Sees Room For United Parcel Service’s Margin Growth

Bank of America raised its price target on UPS to $114 from $108 with a ‘Neutral’ rating after the company's Q3 earnings beat expectations and it raised its guidance.

The firm expects UPS to improve profits steadily over the coming years. According to the analyst, stronger growth in premium services, careful pricing decisions and better operations should help drive those gains.

Goldman Sachs raised its UPS price target to $135 from $132 and kept its ‘Buy’ rating, suggesting a 27% upside potential from its last closing price. The analyst said better-than-expected revenue per package in the U.S. and stronger international profit margins helped UPS beat Q3 earnings estimates. 

UPS’ Holiday Demand To Remain Strong

During the Q3 earnings call, United Parcel Service CEO Carol Tomé said she expects a strong holiday shipping season, with online shopping demand and higher package volumes likely to support its fourth-quarter business. 

“Turning to the holiday season. U.S. consumers remain resilient, and the outlook for holiday demand is strong. Industry forecasts for holiday online retail sales project an average increase of approximately 9% compared to last year. A little over 100 U.S. customers account for approximately 80% of our peak surge. And based on their forecast, we expect average daily volume to increase approximately 25% from the third quarter to the fourth quarter.”

Beyond preparing for the holiday rush, UPS is pursuing changes to improve revenue quality and strengthen operating performance. UPS cut back on less profitable deliveries, including reducing its Amazon shipments by about half, to free up capacity. Tomé said the company is seeking additional growth from premium offerings while adjusting its business mix to support better returns.

UPS Stock: Retail Stance

On Stocktwits, retail sentiment around the stock flipped to ‘bullish’ from ‘bearish’. 

A user said, “UPS walked away from low-margin volume and still beat and raised. Wall Street finally rewarding a company for shrinking the right way.” 

UPS stock has gained nearly 7% year-to-date. 

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