Stifel has confirmed its Buy rating on UPS (NYSE:UPS), setting a price target of $112.00 following the logistics leader's third-quarter 2025 earnings which outpaced expectations. Currently trading at a price-to-earnings ratio of 16.89, UPS is viewed as slightly undervalued based on InvestingPro's analysis.
According to Stifel's review, UPS has made notable strides in achieving savings from its ongoing transformation efforts, maintaining disciplined yield management, and exercising effective cost controls. These advances come despite the company contending with challenging shipment volumes. Financially, UPS remains strong with reported revenues of $89.48 billion and EBITDA totaling $11.6 billion over the past twelve months, reflecting its resilient fundamentals.
Looking ahead, UPS management has issued guidance targeting adjusted earnings per share of $2.25 at midpoint on revenue projected at $24 billion. They anticipate an operating margin range between 11% and 11.5%, indicating confidence in delivering solid performance through the peak season period. This outlook underscores management's ability to navigate ongoing pressures from a decline in Amazon-related volume and trade conditions.
Stifel's focus remains on ongoing execution of UPS's strategies, particularly how U.S. Domestic margins will hold up during peak season. The firm is analyzing whether improvements in revenue per shipment will offset any rises in cost per shipment, in addition to the visibility of incremental savings from transformation initiatives flowing into results.
UPS is characterized by Stifel as a distinctive large-cap opportunity offering significant income potential within its sector. Although the stock's price appreciation has been modest relative to its peers, the company's narrative is viewed as more unique. Cyclical market recovery continues to lend positive momentum. Data from InvestingPro highlight UPS's substantial dividend yield of 6.0%, complemented by a 27-year track record of consistent dividend payments. Furthermore, UPS boasts a return on common equity of approximately 34%, solidifying its status as an attractive income investment.
Additional analyst actions illustrate mixed perspectives in the market. Evercore ISI recently increased its price target for UPS to $113, citing macroeconomic tailwinds such as slowing U.S. Domestic revenue growth paired with accelerated China exports. Raymond James reaffirmed a Strong Buy rating, raising its price target to $275, maintaining optimism about the company's growth trajectory. Conversely, BNP Paribas Exane downgraded UPS to Underperform with a decreased price target of $85, highlighting concerns over market share losses linked chiefly to Amazon volume reductions.
BofA Securities upgraded UPS from Underperform to Neutral, adjusting its price target upward to $114 as the company recovers from disruptions faced earlier in the year. On the safety front, the National Transportation Safety Board disclosed ongoing investigations triggered by a UPS cargo aircraft crash in Kentucky. Investigators identified that a component involved had previously known cracks, emphasizing safety considerations in operational reviews.
These diverse developments underscore the current challenges and opportunities confronting UPS as it operates within a complex logistics landscape. Investors and analysts continue to weigh the company's ability to execute transformation plans successfully while mitigating risk factors in volume and market dynamics.