UPS(US:UPS) ZACKS·2025-04-24 14:36Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on United Parcel Service (UPS), and highlights the importance of using these recommendations in conjunction with other analytical tools like the Zacks Rank. Group 1: Brokerage Recommendations for UPS - UPS has an average brokerage recommendation (ABR) of 1.94, indicating a consensus between Strong Buy and Buy based on 29 brokerage firms' recommendations [2] - Out of the 29 recommendations, 17 are classified as Strong Buy, accounting for 58.6% of the total recommendations [2] Group 2: Limitations of Brokerage Recommendations - Studies indicate that brokerage recommendations have limited success in guiding investors towards stocks with the highest price increase potential [5] - Brokerage firms often exhibit a strong positive bias in their ratings due to vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell [6][10] - The interests of brokerage firms may not align with those of retail investors, suggesting that these recommendations should be used to validate personal analysis rather than as standalone guidance [7] Group 3: Zacks Rank vs. ABR - The Zacks Rank is a proprietary stock rating tool that classifies stocks into five groups based on earnings estimate revisions, providing a more reliable indicator of near-term price performance compared to ABR [8][11] - Unlike ABR, which is based solely on brokerage recommendations, the Zacks Rank is updated frequently to reflect changes in earnings estimates, making it a timely tool for predicting stock price movements [12] Group 4: Current Earnings Outlook for UPS - The Zacks Consensus Estimate for UPS has declined by 1.7% over the past month to $7.63, indicating growing pessimism among analysts regarding the company's earnings prospects [13] - This decline in earnings estimates has resulted in a Zacks Rank of 4 (Sell) for UPS, suggesting caution despite the Buy-equivalent ABR [14]