Where Will UPS Be in 1 Year?

Core Insights - The article discusses the current state and future prospects of United Parcel Service (UPS), highlighting the challenges faced by the company and its guidance for upcoming years [2][3]. Financial Guidance - UPS provided guidance for 2024 revenue between $92 billion and $94.5 billion, with actual results reported at $91.1 billion. For 2026, the guidance was set at $108 billion to $114 billion, while Wall Street analysts currently estimate $88 billion [4]. - The consolidated adjusted operating profit guidance for 2024 was between $9.2 billion and $10 billion, with actual results at $8.9 billion. For 2026, the guidance was $14.3 billion to $14.9 billion, while the analyst consensus is $8.7 billion [4]. Challenges Faced - Following the investor day in March 2024, UPS revised its full-year 2024 guidance to $93 billion, slightly below the previous midpoint, with an implied adjusted operating profit of $8.74 billion [5]. - The decline in performance is attributed to a shift in customer preferences towards value products and an increase in lower-value volumes from new e-commerce entrants in the U.S. [6]. - UPS is unlikely to meet the 2026 targets set during the investor day due to tariff uncertainties and overcapacity in the small package segment [6]. Strategic Focus - The company aims to focus on growth in higher-margin markets, particularly small and medium-sized businesses (SMB) and healthcare [7]. - It is expected that excess capacity in the U.S. small package delivery market will decrease as demand improves and supply growth moderates [7]. - Investments in the "network of the future" are anticipated to enhance productivity, reduce costs per package, and facilitate facility consolidation [7].