UPS - Embedded Expectations Analysis - 2019 12 09
United Parcel Service, Inc. (UPS:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 23.3x Uniform P/E. At these levels, the market has somewhat bullish expectations for the firm, but management may be concerned about their free cash flow, volume, and trade between the U.S. and China.Specifically, management may be exaggerating the value of their strategic partnership with stamps.com, and they may lack confidence in their ability to sustain their adjusted free cash flow improvement. Furthermore, they may be concerned about the impact of U.S.-China trade on their profitability, and they may lack confidence in their ability to sustain their operating performance through the holiday season. Finally, they may lack confidence in their ability to sustain recent volume improvement, and they may be concerned about further volume weakness in the U.K.
United Parcel Service provides transportation services, primarily domestic and international letter and package delivery. The company reports its operations in three segments: United States Domestic Package, which includes the time-definite delivery of letters, documents and packages throughout the United States; International Package, which includes delivery to several countries and territories worldwide, including shipments wholly outside the United States, as well as shipments with either origin or destination outside the United States; and Supply Chain & Freight, which includes the company's Forwarding, Logistics, Coyote, Marken, UPS Mail Innovations, UPS Freight and other aggregated business units.
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