United Parcel Service, Inc. (NYSE:UPS) Just Reported, And Analysts Assigned A US$106 Price Target

There's been a notable change in appetite for United Parcel Service, Inc. (NYSE:UPS) shares in the week since its quarterly report, with the stock down 16% to US$87.18. It looks like the results were a bit of a negative overall. While revenues of US$21b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.2% to hit US$1.51 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the current consensus, from the 27 analysts covering United Parcel Service, is for revenues of US$87.4b in 2025. This implies a small 3.2% reduction in United Parcel Service's revenue over the past 12 months. Statutory earnings per share are expected to decrease 6.5% to US$6.33 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$87.2b and earnings per share (EPS) of US$6.75 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

View our latest analysis for United Parcel Service

The average price target fell 6.8% to US$106, with reduced earnings forecasts clearly tied to a lower valuation estimate. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values United Parcel Service at US$133 per share, while the most bearish prices it at US$75.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 6.3% annualised decline to the end of 2025. That is a notable change from historical growth of 1.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.0% per year. It's pretty clear that United Parcel Service's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for United Parcel Service. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on United Parcel Service. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple United Parcel Service analysts - going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for United Parcel Service (of which 1 makes us a bit uncomfortable!) you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.