Oppenheimer Thinks United Parcel’s Stock is Going to Recover

By Carrie Williams

Oppenheimer analyst Scott Schneeberger reiterated a Buy rating on United Parcel (NYSE: UPS) today and set a price target of $116. The company’s shares closed yesterday at $103.19, close to its 52-week low of $100.46.

Schneeberger wrote:

“We recently conducted investor meetings with CFO Richard Peretz. Key takeaways included: 1) optimism for improved performance in 2017 peak as UPS drives efficiencies via automation/more effectively manages elevated e-commerce growth; 2) International Package volume growth momentum appears likely to perpetuate; and 3) continued acquisition/alliance activity should further broaden the company’s global portfolio/bolster returns. We anticipate continued mid-single digit revenue growth via elevated e-commerce growth in US Domestic, volume momentum in International Package, and improving Supply Chain & Freight conditions. Although US Domestic Package profitability is expected to be muted near-term on automation/expansion investments, we’re constructive UPS can stabilize/ultimately expand margin and accelerate earnings growth on improved efficiencies.”

According to TipRanks.com, Schneeberger is a top 100 analyst with an average return of 13.0% and a 66.9% success rate. Schneeberger covers the Services sector, focusing on stocks such as New Oriental Education Tech, Service Corp International, and Capella Education Company.

United Parcel has an analyst consensus of Moderate Buy, with a price target consensus of $113.25.

Based on United Parcel’s latest earnings report for the quarter ending March 31, the company posted quarterly revenue of $15.29 billion and quarterly net profit of $1.16 billion. In comparison, last year the company earned revenue of $14.31 billion and had a net profit of $1.13 billion.

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United Parcel Service, Inc. is a logistics and package delivery company, which provides supply chain management services. Its logistics services include transportation, distribution, contract logistics, ground freight, ocean freight, air freight, customs brokerage, insurance and financing. The company operates its business through three segments: U.S. Domestic Package, International Package and Supply Chain & Freight. The U.S. Domestic Package segment offers a full spectrum of U.S. domestic guaranteed ground and air package transportation services. This segment also offers time-definite, money-back guaranteed and small package delivery services in the U.S. The International Package segment includes small package operations in Europe, Asia-Pacific, Canada and Latin America, the Indian sub-continent, and the Middle East and Africa. This segment also offers guaranteed day and time-definite international shipping services. The Supply Chain & Freight segment offers transportation, distribution and international trade and brokerage services, as well as financial and information services. United Parcel Service was founded by James E. Casey and Claude Ryan on August 28, 1907 and is headquartered in Atlanta, GA.