UPS Near-Term Outlook Is Favorable Despite Margin Concerns, Analyst Upgrades Stock

BMO Capital Markets analyst Fadi Chamoun upgraded United Parcel Service, Inc. (NYSE:UPS) to Outperform from Market Perform and reduced the target price to $150 (from $155).

The analyst writes that they still have concerns about the trajectory of UPS’s Domestic operating margins in the medium-to-long term.

Chamoun notes the combination of cyclical tailwinds, moderating unit cost inflation, positive contributions from cost reduction programs, and a low valuation make the near-term risk/reward favorable.

After nearly two years of soft B2B demand, the analyst expects lower interest rates and a recovering industrial …

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