JPMorgan believes that UPS shares might be held without any major catalyst driving growth. JPMorgan’s Brian Ossenbeck wrote in a Friday report that pressure continues on the U.S. market and ecomm growth slows. We believe that UPS is performing well in dynamic environments, but further improvement will occur gradually and we don’t see any upside to the 2022 guide. UPS received a rating of neutral, downgrading from its previous overweight status. UPS also saw its price target drop from $229 – $202, which would mean a 14% gain from Thursday’s closing stock price. Parcel companies could be experiencing overcapacity as e-commerce growth slows down and pandemic trends return to normal. JPMorgan said that Amazon could have constructed warehouses in excess of what is needed to satisfy current market demand. UPS will negotiate its 2023 contract with Teamsters. Ossenbeck stated that while Amazon’s comments on excessive capacity and the negotiations with 2023 Teamsters will have no immediate financial impact, they will affect UPS valuation. UPS is down 17.4% this year, in line with the S & P 500’s 17.5% decline in 2022. —CNBC’s Michael Bloom contributed reporting.
The United Parcel Service truck delivered boxes in Manhattan, New York City on April 26, 2022.
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UPSJPMorgan believes shares might be put on hold without major growth catalysts.