UPS Q2 Preview: Stock Down In 10 Of Last 12 Reports, Market Expert Warns 'Earnings Season Has Not Been Kind'

Parcel delivery company United Parcel Service (NYSE:UPS) could provide a gauge on shipping demand from consumers against the backdrop of tariffs and macroeconomic concerns when the company reports second-quarter financial results Tuesday before market open.

• UPS shares are lagging the market. Check the latest price here.

Here are the earnings estimates, what experts are saying and key items to watch.

Earnings Estimates: Analysts expect UPS to report second-quarter revenue of $20.87 billion, down from $21.82 billion in last year's second quarter, according to data from Benzinga Pro.

The company beat analyst estimates for revenue in the first quarter, but has missed estimates in nine of the last 10 quarters.

Analysts expect UPS to report second-quarter earnings per share of $1.57, down from $1.79 in last year's second quarter. The company has beaten analyst estimates for earnings per share in two straight quarters and in six of the last 10 quarters overall.

Read Also: UPS To Cut 20,000 Jobs, Close Facilities As Amazon Shipments Drop Amid Trump Tariffs

What Experts Are Saying: Recent history has proven unkind to United Parcel Services when reporting quarterly financial results, as highlighted by Freedom Capital Markets Chief Global Strategist Jay Woods.

"Earnings season has not been kind to the global shipper. Shares have fallen after 10 of the last 13 quarterly reports with an average one-day loss of -3.6%," Woods said in a weekly newsletter.

Woods said that even the quarters in which UPS beat estimates saw shares often decline due to disappointing guidance.

"Growth concerns continue. Revenue and net income have declined since 2022, and EPS is still below 2020 levels. Add in profit deterioration due to tariffs, weaker small-business demand, and Amazon share loss and investors have been taking their portfolios allocations to more promising destinations."

Woods said the "one-year daily chart" for UPS is "showing signs of life" as shares could rally back to $112, the stock's 200-day moving average. The market expert cautions that UPS still needs to show that the worst is over for the stock.

"Over the long term, shares still have some work to do. Usually for turnarounds to occur it takes multiple quarters of good news and positive price action. We have one good one in the books, let's see if they can make it two this week when they report."

UPS focusing on internal efficiencies and cost reductions to boost profitability could be a winning strategy, Bank of America analyst Ken Hoexter said ahead of the company's quarterly results.

The analyst maintained a Buy rating and $115 price target.

Hoexter said UPS offers exposure to ecommerce growth and trades at attractive valuation multiples. The analyst highlighted the company divesting low-margin operations and reducing overall costs.

The analyst was cautious on the phased removal of revenue from Amazon.com Inc. (NASDAQ:AMZN) and a potential slow macroeconomic recovery.

Here are other recent analyst ratings on UPS and their price targets:

• Citigroup: Maintained Buy rating, raised price target from $122 to $127
• JPMorgan: Maintained Neutral rating, lowered price target from $110 to $107
• UBS: Maintained Buy rating, lowered price target from $128 to $124

Key Items to Watch: After missing analyst estimates for multiple quarters, UPS turned in a strong first-quarter report. Analysts and investors are looking for further momentum in the second quarter.

In the first quarter, UPS saw its domestic segment revenue increase 1.4% year-over-year and its international segment revenue rise 2.7% year-over-year, helping to offset weakness from other segments.

Cost cuts will be a big topic with the company announcing job cuts back in April and a decision to lower Amazon delivery volume.

Investors and analysts will want to see where the company's growth is going to come from without the Amazon delivery volumes.

All eyes will be on the company's guidance for the full fiscal year with two quarters completed, which will highlight what investors should expect from the company and the overall sector in the second half of the calendar year.

UPS's report comes a month after FedEx Corporation (NYSE:FDX) reported quarterly results. FedEx beat analyst estimates for revenue and earnings per share in the quarter, but its guidance disappointed, sending both FedEx and UPS shares down.

Price Action: UPS stock is down 1.4% to $102.09 on Monday versus a 52-week trading range of $90.55 to $145.01. UPS stock is down 17.6% year-to-date, trailing the -11.7% performance of its peer, FedEx, and the 8.9% gain of the S&P 500.

Read Next:

• Jim Cramer: UPS Is A ‘Very Tough Stock To Own’

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