Can UPS Stock Beat the Market Over the Next 5 Years?

Core Viewpoint - The past five years have been difficult for United Parcel Service (UPS) investors, with shares declining by 32%. However, the outlook for the next five years appears more promising, especially with recent positive momentum in the stock price and analyst upgrades [1][2]. Historical Performance - UPS experienced significant revenue growth during the COVID-19 pandemic, with a mid-teen percentage increase in 2020 and 2021, following a decade of modest single-digit growth [5]. - The company's revenue growth has since slowed, with a deceleration to 3% in 2022, a decline of 9% in 2023, and flat revenue expected in 2024. A further 3% decline is anticipated for the last year [7][9]. Recent Developments - UPS shares have increased by 9% in the first six trading days of 2026 and have risen 32% since hitting a low three months ago. Analysts have raised their price targets for the stock, and the company offers a dividend yield of 6.1% [2][9]. - The company faced challenges as Amazon reduced its reliance on UPS, and a five-year labor agreement with the Teamsters union has locked in escalating labor costs through 2028 [6]. Future Outlook - Analysts predict that UPS's bottom line will begin to grow again in 2026, provided the company maintains its annual dividend increases and successfully implements its turnaround strategy [9].