UPS - Embedded Expectations Analysis - 2020 03 05
ï€ United Parcel Service, Inc. (UPS:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) Earnings, with a 22.5x Uniform P/E. At these levels, the market has somewhat bullish expectations for the firm, but management may be concerned about their small-to-medium sized business initiatives, the sustainability of growth, and their network expansion investmentsï€ Specifically, management may be concerned about their expansion of My Choice for small-to-medium sized businesses (SMB), the sizeable start-up costs for their SMB initiatives, and their ability to help SMB customers compete and grow. Moreover, they may lack confidence in their ability to sustain revenue, B2B, and dividend growth, accelerate their network expansion, and execute their transformation initiatives. Also, management may be concerned about their investments in electric vehicle manufacturer Arrival and route optimization technologies, and they may be downplaying concerns about the impact of ongoing US-China negotiations. Finally, they may be concerned about the launch of their Sunday delivery service, their transition to faster delivery options, and Amazon's rising percentage of total company revenue
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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