News

UPS higher as J.P. Morgan upgrades on pricing, capacity

UPS higher as J.P. Morgan upgrades on pricing, capacity
Business
United Parcel Service (UPS) shares rose on Thursday after J.P. Morgan upgraded the delivery giant to overweight from neutral and raised its share-price target to $243 from $224.

The move came “after the 2021 Investor Day [Wednesday] provided incremental positives around pricing power, capacity discipline, and the dividend yield,” wrote J.P. Morgan analyst Brian Ossenbeck.

“The upgrade completes our positive bias on parcel pricing power that started in July 2020. …

“Last week we highlighted a downside bias to UPS from the investor event, and we see an attractive entry point after it underperformed the market by [7 percentage] points and broader industrials by [2 percentage] points.”

UPS recently traded at $202.92 (U.S.), up 0.9 per cent. The stock has climbed 19 per cent over the past six months. It fell 4 per cent Wednesday on a disappointing profit margin forecast.

“We have a healthy respect for what the cycle peak can do to cyclical valuations (see our truckload downgrades from July and October 2020), but simply believe it is too early for a similar concern in parcels,” Ossenbeck said.

UPS also drew positive comments from analysts at Credit Suisse, Barclays and Deutsche Bank.

In April, UPS delivered better-than-expected first-quarter profit, though it opted to hold back on guidance amid what it called continued economic uncertainty.

Atlanta-based UPS posted adjusted net income of $5.47 a share, tripling the FactSet analyst consensus of $1.72 a share.
Read more on Toronto Star
News Topics :
RELATED STORIES :
Business
Union Pacific Corp. was slapped with a downgrade as a result of falling pricing trends, but railroad peer Canadian Pacific Railway Ltd. received a vote of confidence. RBC Capital Markets...
Business
Royal Caribbean Group RCL shares fell Friday after the company said two guests on its Celebrity Millennium ship tested positive for COVID 19. The two cruisers are asymptomatic and in isolation,...
Business
Riding high from record package deliveries amid the coronavirus pandemic , United Parcel Service Inc. and FedEx Corp. are moving on to their next challenge proving they can boost profit...
Business
MONTREAL Bombardier Inc. said Thursday it will begin to ship Canadian made C Series jets to Delta Air Lines this year after scoring a big trade victory in the United...
Business
MONTREAL—Transat AT Inc. executives have pledged to raise prices next summer after a spike in fuel costs sent the carrier on course to its least profitable third quarter in a decade....