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Why Shares in UPS Declined by 20% in the First Half of 2025
Why Shares in UPS Declined by 20% in the First Half of 2025

Globe and Mail

timea day ago

  • Business
  • Globe and Mail

Why Shares in UPS Declined by 20% in the First Half of 2025

Key Points UPS' earnings guidance and dividend payout could be under threat. Cutting the dividend could be good news for investors. 10 stocks we like better than United Parcel Service › Shares in United Parcel Service (NYSE: UPS), more commonly known as UPS, declined by 20% in the first half of 2025, according to data provided by S&P Global Market Intelligence. The decline comes as investors increasingly stress the company's prospects of meeting its initial full-year guidance due to the ongoing trade tariff dispute negatively impacting delivery volumes. After missing its initial full-year implied earnings guidance in 2023 and 2024, the last thing investors want to see is management fail to meet its targets in 2025. Still, unfortunately, it's a real possibility. Will UPS miss its earnings guidance and cut its dividend? These are good questions because the former is a possibility, and so is the latter. The difference is that cutting the dividend is a potentially good outcome for most investors. Still, the uncertainty around it all isn't good for UPS' share price. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Starting with its earnings guidance, management began the year forecasting $89 billion in revenue and an operating margin of 10.8%, implying an operating profit of $9.61 billion. In addition, management told investors to expect $5.7 billion in free cash flow (FCF), which would help support $5.5 billion in dividend payments and $1 billion in share buybacks. Fast-forward to the first-quarter earnings report, and management declined to update investors on its full-year guidance in light of weaker-than-expected delivery volumes in the first half amid uncertainty created by the trade conflict. Second, the pressure on its earnings guidance translates to pressure on its FCF guidance and, ultimately, its dividend payout and buyback plans, as noted above. The initially planned FCF of $5.7 billion wouldn't have covered the dividend and buybacks in itself. Why cutting the dividend could be good news While appreciating that many investors are holding the stock precisely because it offers a hefty dividend (currently trading on a 6.5% yield), the reality is that using cash generated in the business to hand it back to investors isn't always the best strategy. In fact, most investors buy stocks because they trust management to be able to generate more return on investment than they (investors) can. That's particularly the case with UPS right now, as management has identified growth investment opportunities in areas such as healthcare and small and medium-sized businesses, where it's already highly successful, and has ongoing plans to develop them. Where next for UPS? Investors will eagerly await the second-quarter earnings results in late July and an update on guidance as management battles near-term headwinds while continuing to strategically position the company for long-term growth. Should you invest $1,000 in United Parcel Service right now? Before you buy stock in United Parcel Service, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and United Parcel Service wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,010,880!* Now, it's worth noting Stock Advisor 's total average return is1,047% — a market-crushing outperformance compared to180%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 7, 2025

Why Shares in UPS Declined by 20% in the First Half of 2025
Why Shares in UPS Declined by 20% in the First Half of 2025

Yahoo

timea day ago

  • Business
  • Yahoo

Why Shares in UPS Declined by 20% in the First Half of 2025

UPS' earnings guidance and dividend payout could be under threat. Cutting the dividend could be good news for investors. 10 stocks we like better than United Parcel Service › Shares in United Parcel Service (NYSE: UPS), more commonly known as UPS, declined by 20% in the first half of 2025, according to data provided by S&P Global Market Intelligence. The decline comes as investors increasingly stress the company's prospects of meeting its initial full-year guidance due to the ongoing trade tariff dispute negatively impacting delivery volumes. After missing its initial full-year implied earnings guidance in 2023 and 2024, the last thing investors want to see is management fail to meet its targets in 2025. Still, unfortunately, it's a real possibility. These are good questions because the former is a possibility, and so is the latter. The difference is that cutting the dividend is a potentially good outcome for most investors. Still, the uncertainty around it all isn't good for UPS' share price. Starting with its earnings guidance, management began the year forecasting $89 billion in revenue and an operating margin of 10.8%, implying an operating profit of $9.61 billion. In addition, management told investors to expect $5.7 billion in free cash flow (FCF), which would help support $5.5 billion in dividend payments and $1 billion in share buybacks. Fast-forward to the first-quarter earnings report, and management declined to update investors on its full-year guidance in light of weaker-than-expected delivery volumes in the first half amid uncertainty created by the trade conflict. Second, the pressure on its earnings guidance translates to pressure on its FCF guidance and, ultimately, its dividend payout and buyback plans, as noted above. The initially planned FCF of $5.7 billion wouldn't have covered the dividend and buybacks in itself. While appreciating that many investors are holding the stock precisely because it offers a hefty dividend (currently trading on a 6.5% yield), the reality is that using cash generated in the business to hand it back to investors isn't always the best strategy. In fact, most investors buy stocks because they trust management to be able to generate more return on investment than they (investors) can. That's particularly the case with UPS right now, as management has identified growth investment opportunities in areas such as healthcare and small and medium-sized businesses, where it's already highly successful, and has ongoing plans to develop them. Investors will eagerly await the second-quarter earnings results in late July and an update on guidance as management battles near-term headwinds while continuing to strategically position the company for long-term growth. Before you buy stock in United Parcel Service, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and United Parcel Service wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,010,880!* Now, it's worth noting Stock Advisor's total average return is 1,047% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends United Parcel Service. The Motley Fool has a disclosure policy. Why Shares in UPS Declined by 20% in the First Half of 2025 was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

‘They kept coming': Hundreds of packages pile up outside US woman's home
‘They kept coming': Hundreds of packages pile up outside US woman's home

Straits Times

time2 days ago

  • Business
  • Straits Times

‘They kept coming': Hundreds of packages pile up outside US woman's home

Sign up now: Get ST's newsletters delivered to your inbox At one point, Ms Holton estimated that there were as many as 120 boxes sitting on her property. SAN JOSE, California - About a year ago, a single package appeared on Ms Karen Holton's porch in San Jose, California. She was bewildered; she had not ordered anything, and neither had her neighbours. So she dropped the package at United Parcel Service (UPS) , and thought that was the end of it. She was wrong. 'They kept coming,' Ms Holton, 55, said in an interview on July 11 . It was just the beginning of a year-long ordeal as the unintended recipient of misdirected Amazon returns. Over months, an onslaught of cartons and boxes grew at the doorstep of Ms Holton's home, a single-family house on a corner lot, in stacks so high that she was unable to easily use her door or get to her mail. 'They were always put on my porch, or if the porch was too full, they would pile up outside,' she said. 'It was hit and miss. A couple of weeks there were none. And then 10 in a week. No rhyme or reason to it. Top stories Swipe. Select. Stay informed. Asia Air India crash report shows pilot confusion over engine switch movement Business F&B operators face tougher business landscape amid rising costs and stiff competition Business What's in store for policyholders after GE removes pre-authorisation letters for two private hospitals Multimedia Which floor is this? Chongqing's maze-like environment powers its rise as a megacity Life At 79, she can do 100 pull-ups: Why more seniors are hitting the gym Asia 'Woven air': Ancient fabric spun across history makes comeback amid lies and climate change World US man who decapitated father and displayed head on YouTube gets life in prison Business 4 conditions that allow seniors with dementia to sign wills 'I had to move them if I wanted to be able to use my porch or get into my house,' she said. Eventually, she started to move them to the carport, and covered the boxes with a tarp, worried about rain, fire and rodents. The chaotic stacks of mismatched packages grew into musty walls so tall that she was unable to park there. Occasionally, she opened a few, and pulled out what she described as 'cheap' fake leather car seat covers. At one point, she estimated that there were as many as 120 boxes sitting on her property. Her ordeal as the recipient of e-commerce returns gone wrong was reported by San Francisco's news outlet ABC 7, which portrayed it as a case study in how a seller based overseas – in this case an outfit called Liusandedian that sold car seat covers configured to fit various makes and models – can use any random address in the United States as the location for its returns. The company's online listings appeared inactive on July 11 . Ms Holton did not know how her address came to be the one provided by the seller, which she said appeared to be based in China. She tried to stop the flow. She contacted FedEx and UPS, she said, and was told that she either had to be at the door and decline the deliveries in person, or to register her address as permanently refusing deliveries. 'Anytime I would hear a truck pull up, I would run out and make sure they were not dropping off,' she said. She said she was able to intercept and stop the delivery of dozens of packages, estimating that hundreds were sent to her. Ms Holton said she contacted Amazon six times to file a complaint and was told she had to drop off the packages herself at an Amazon return location. Amazon said in a statement on July 11 that it had taken steps to stop the packages from being delivered to Ms Holton's address, and that it would collect others that may still be in transit, should they arrive at her home. 'We'd like to thank ABC 7 On Your Side for bringing this to our attention,' an Amazon spokesperson, Ms Sharyn Ghacham, said in the statement. 'We've apologised to the customer and are coordinating with the seller responsible toward a permanent resolution.' On July 8 , a large truck that Ms Holton described as one typically used when cars are repossessed, pulled up to her property and gathered the remaining packages from her carport and porch. 'Even the guy that came to pick them up was like, 'What the … ?'' she said. Ms Holton is relieved, but wary, wondering whether this is really an end to a nightmare in which even porch pirates have been of no help. 'I was hoping somebody would steal it off my carport,' she said of the growing stack of boxes. 'Even thieves didn't want it.' NYTIMES

Citi Lifts PT on United Parcel Service (UPS) to $127 from $122, Keeps Buy Rating
Citi Lifts PT on United Parcel Service (UPS) to $127 from $122, Keeps Buy Rating

Yahoo

time3 days ago

  • Business
  • Yahoo

Citi Lifts PT on United Parcel Service (UPS) to $127 from $122, Keeps Buy Rating

United Parcel Service, Inc. (NYSE:UPS) is one of the . On July 9, Citi analyst Ariel Rosa maintained a Buy rating on United Parcel Service, Inc. (NYSE:UPS), raising the price target to $127 from $122. A warehouse filled with boxes of parcels, symbolizing the companies reliable logistics services. The analyst told investors that Citi sees balanced risk/rewards associated with transport stocks as the market heads into fiscal Q2 reports, with a backdrop of macro uncertainty and 'still-soft' demand. The firm also stated that it is 'less enthusiastic' about the sector as compared to its sentiments three months ago, primarily due to the recent rally in the shares. United Parcel Service, Inc. (NYSE:UPS) is a parcel delivery company that provides global supply chain management solutions. The company's operations are divided into the following segments: US Domestic Package, International Package, and Supply Chain Solutions. While we acknowledge the potential of UPS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

1 Magnificent High-Yield Dividend Stock Down 50% to Buy and Hold Forever
1 Magnificent High-Yield Dividend Stock Down 50% to Buy and Hold Forever

Yahoo

time4 days ago

  • Business
  • Yahoo

1 Magnificent High-Yield Dividend Stock Down 50% to Buy and Hold Forever

Investors have moved from overenthusiastic to overly pessimistic. This industry giant now offers a huge 6.5% yield. Although the business itself is in flux, the importance of the service it provides isn't going away anytime soon. 10 stocks we like better than United Parcel Service › Wall Street has a habit of moving between extremes, often swinging from shocking enthusiasm to despondent pessimism. That's what appears to be on display today with this 6.5% high-yield dividend stock. It's down more than 50% from its peak, and long-term income investors should probably do a deep dive, because the service on offer is vital to modern life. Shares of United Parcel Service (NYSE: UPS), which normally just goes by UPS, have been a roller coaster ride. When the coronavirus pandemic hit in 2020, investors seemed to believe that social distancing would be a more long-term thing. UPS and its package delivery peers rose dramatically, as Wall Street extrapolated temporarily rising demand out way too far into the future. When the world found a way to live with COVID and opened back up again, investors dumped UPS shares. The stock is now down more than 50% from the highs it reached in 2022. That drop wasn't just about COVID, however, as management also set about a business revamp. As UPS' business cooled down, it basically added to the negativity by attempting to streamline and upgrade its business, which required costly capital investments. It also had to deal with a new labor contract, which increased employee costs. And just when everything seemed to be evening out, UPS pre-emptively decided to reduce its exposure to its largest customer, (NASDAQ: AMZN). The thing is, UPS appears to be making good choices. For example, making better use of technology so that the company can operate with fewer facilities and employees is not just a cost-saving move, but one that keeps the company current with the world around it. Amazon's business is high-volume, but low-margin, and UPS is specifically attempting to focus on higher-return sectors. As far as the long term goes, people need physical things to live. UPS has one of the most extensive and well-run package delivery services in the world. It is highly unlikely that demand for quickly and efficiently moving items from one place to another will ever go away. But investors are downbeat and the stock has cratered, which has pushed the yield up to its current lofty level of 6.5%. There are risks here that have to be considered. For example, the dividend payout ratio is around 90%, which is quite high, and revenues were down year over year in the first quarter of 2025. However, adjusted earnings rose year over year, helped along by a 20-basis-point improvement in adjusted operating margin. This is basically the outcome UPS is looking to achieve. Management is willing to accept lower revenues as it moves away from less attractive business. The plan is to generate higher margins as it increases its exposure to more attractive business. Assuming it can continue along this path, UPS is likely to have a solid future that includes continuing to reward dividend investors well. Still, UPS' business overhaul is a risk, and Wall Street is clearly saying that the risk looks high. It wouldn't be wise for conservative dividend investors to ignore the risks, and a dividend cut is a possibility. However, UPS' business is getting generally stronger thanks to the revamp management has undertaken, and it is highly unlikely that package delivery services will stop being needed. For more intrepid investors, this high-yield stock could be worth buying and holding for the long term. Before you buy stock in United Parcel Service, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and United Parcel Service wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $687,764!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $980,723!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 179% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and United Parcel Service. The Motley Fool has a disclosure policy. 1 Magnificent High-Yield Dividend Stock Down 50% to Buy and Hold Forever was originally published by The Motley Fool

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