BMO Capital has increased its price objective for United Parcel Service Inc. (NYSE: UPS) to $110.00, up from $105.00, while retaining a Market Perform rating on the shares. The updated target implies only a small upside relative to UPS shares trading at $107.22 and sits near InvestingPro's Fair Value calculation, which suggests UPS is marginally undervalued.
The change in BMO's target follows UPS's fourth-quarter 2025 results, which outpaced consensus estimates chiefly on the back of stronger results in the U.S. Domestic segment. The company reported several beats in its quarterly metrics, a performance that has contributed to a 9.39% total price return for the stock over the past six months.
On the headline numbers, UPS posted earnings per share of $2.38 for the fourth quarter, above the analyst consensus of $2.20. Revenue for the period came in at $24.5 billion versus expectations of $24.01 billion, representing an 8.18% earnings surprise and a 2.04% revenue surprise relative to estimates.
Looking ahead, BMO noted that UPS provided 2026 guidance for adjusted EBIT and EPS that is in line with market expectations. However, BMO flagged that the near-term outlook - especially in the first quarter of 2026 - appears to be below current consensus. The bank expects a softer start to the year with multiple headwinds, and it anticipates those pressures will ease in the second half of 2026 alongside a modest improvement in underlying demand.
Persistent uncertainty, limited visibility into an improvement in B2B demand, and a negative short-term outlook were cited by BMO as reasons to maintain its Market Perform stance despite the recent quarterly outperformance and the modestly higher price target.
In related analyst activity, Truist Securities raised its price target on UPS from $120 to $130 while maintaining a Buy rating. Truist characterized 2026 as a "transition year" for the company based on its updated estimates.
These analyst moves reflect divergent views: BMO's more cautious posture centered on short-term uncertainty and B2B demand visibility, and Truist's more constructive stance tied to its framing of 2026 as a transition year. Investors evaluating UPS's near-term outlook will likely weigh the company's strong fourth-quarter results against the guidance and the cautious commentary about the first half of 2026.
Summary: BMO raised its UPS price target to $110 but left the rating at Market Perform after Q4 2025 beats driven by U.S. Domestic strength. UPS reported EPS of $2.38 and revenue of $24.5 billion, topping analyst estimates. BMO sees a softer first half of 2026, limited B2B demand visibility, and expects improvement in the latter half of the year. Truist also lifted its target to $130 and kept a Buy rating, calling 2026 a transition year.
Key points:
- Price target: BMO raised to $110 from $105 while keeping Market Perform; shares at $107.22 imply modest upside.
- Q4 results: EPS $2.38 vs. $2.20 expected; revenue $24.5 billion vs. $24.01 billion expected, producing notable surprises on both lines.
- Analyst divergence: Truist raised its target to $130 and retained a Buy rating, labeling 2026 a transition year.
Risks and uncertainties:
- Persistent uncertainty and a negative short-term outlook cited by BMO could pressure shares in the near term - relevant to equity investors and the logistics sector.
- Limited visibility into improvement in B2B demand creates forecasting challenges for revenue and margins - impacting corporate shippers and industrial customers.
- First-half 2026 weakness, particularly in the first quarter, could temper performance until the expected easing of headwinds later in 2026 - affecting earnings expectations across market participants.