From Nasdaq: 2025-02-08 07:30:00

United Parcel Service (NYSE: UPS) stock plummeted 14.1% after disappointing Q4 and full-year 2024 results, hitting its lowest level since July 2020. Despite a high 5.9% yield, some investors question if it’s sustainable due to UPS’ challenges.

UPS overestimated package volumes in 2023 and missed revenue targets in 2024, causing a decline in operating margins and earnings per share. The company adjusted its 2026 forecast, aiming for a 5.5% growth rate and revenue of $108 billion to $114 billion by 2026.

UPS plans to cut Amazon volumes by 50% by June 2026, impacting revenue but potentially boosting margins. The decision aims to improve profitability, despite Amazon being a key customer for UPS. CEO Carol Tomé highlighted the move on an earnings call.

Despite UPS’ struggles, it remains a buy for long-term income investors. With lower revenue and operating margins expected in 2025, the stock’s 5.9% yield and low price-to-earnings ratio make it a compelling opportunity for patient investors. Management’s strategic direction will be crucial for the stock’s long-term performance.



Read more at Nasdaq: Is It Finally Time to Give Up on UPS After the High-Yield Dividend Stock Crashed to a 4-Year Low?