Stephens on Wednesday increased its 12-month price target for UPS to $115.00 from $113.00 but maintained an Equal Weight rating on the shares. The firm pointed to firm pricing power as the primary driver behind UPSs stronger-than-expected fourth-quarter results, while noting that shipping volumes were somewhat below its projections.
For the fourth quarter of 2025, UPS reported adjusted earnings per share of $2.38, topping both Stephens own estimate and consensus expectations of $2.20. Over the trailing twelve months, the company posted diluted EPS of $6.56, which equates to a price-to-earnings ratio of 16.31. The company reported a gross profit margin of 22.5 percent for the period, underscoring its profitable position within the logistics sector.
Stephens emphasized that UPS continues to emphasize pricing discipline as a way to enhance revenue quality. The firm said that strong pricing was a key metric investors watched in the quarter and was central to the earnings beat, even as volumes came in slightly below the firmss forecasts.
Looking to 2026, UPS issued guidance roughly in line with market consensus. However, management signaled elevated cost pressures in the first half of the year that Stephens expects will produce margins below market expectations for that period. The firm flagged these near-term cost headwinds as an important consideration for investors evaluating the companys trajectory into 2026.
On the international front, Stephens noted headwinds from lower volumes originating in Mexico, Canada and China. Those declines have been partially offset by replacement volumes from other origins, but those shipments carry lower margins, which is weighing on revenue quality and profitability outside the U.S.
From a balance-sheet perspective, Stephens described UPS as operating on solid financial footing, citing an Altman Z-Score of 3.29 and a moderate leverage profile. The company is scheduled to report its next quarterly results on April 28, 2026.
Analyst targets for UPS span a wide range. The street low-to-high runs from $75 to $130, with a consensus recommendation of 2.3 on the typical 1-to-5 scale, placing the stock between Buy and Hold on average.
Several other firms revised their targets after the quarter. BMO Capital raised its target to $110, noting strength in the U.S. Domestic segment following the fourth-quarter results. Truist Securities increased its target to $130 and characterized 2026 as a transition year for the company. UBS lifted its target to $125 while trimming its first-quarter earnings forecast from $1.38 per share to $1.12 per share, citing margin headwinds.
Raymond James set its target at $127, pointing to recent network redesign efforts and a meaningful reduction in exposure to the companys largest customer as positive developments. Bernstein SocGen Group adjusted its target to $128, highlighting improved margins despite lower volumes and revenue, driven in part by reduced costs related to uneconomic volume from a major retail partner.
The range of revisions reflects divergent analyst views on UPSs near-term margin profile, the durability of pricing gains, and how quickly volume trends will normalize. While pricing strength supported a quarter that beat estimates, the company faces identifiable risks in the first half of 2026 and ongoing international volume challenges that could temper margin expansion.