Should You Buy United Parcel Service (UPS) Stock While It's Below $193?

Core Insights - UPS has experienced significant stock price fluctuations, reaching a peak of $192.88 in February 2022, a 286% increase from its IPO price of $50 in 1999, but has since fallen to approximately $107 [1] Group 1: Historical Performance - From 2019 to 2021, UPS saw its average daily package volume rise from 21.88 million to 25.25 million, and average revenue per package increase from $10.87 to $12.32. Total revenue grew from $74.09 billion to $97.29 billion, with adjusted operating margins expanding from 11% to 13.5%, and diluted EPS nearly doubling from $7.53 to $14.68 [3] - The growth during this period was largely driven by a surge in e-commerce sales due to the pandemic, which contributed to the stock reaching its all-time high in early 2022 [4] Group 2: Recent Challenges - Following the pandemic, UPS faced a decline in average daily package volumes, total revenue, and adjusted operating margins, with diluted EPS dropping significantly. The average daily package volume fell to 19.97 million by 2025, while total revenue is projected to decrease to $90.96 billion in 2024 [5][6] - Rising inflation has further pressured UPS by reducing consumer spending and increasing fuel and labor costs. Additionally, concerns over a potential strike led customers to shift deliveries to competitors like FedEx [6][7] Group 3: Future Outlook - In 2024, UPS signed a new contract with the Teamsters to avoid a strike, which stabilized shipments in a more favorable macro environment. However, the contract also introduced higher labor and pension costs, alongside divestments and ongoing digital investments, which have negatively impacted margins [7]