Company Overview: United Parcel Service, Inc. (NYSE: UPS) is a package delivery company and a provider of global supply chain management solutions. Its segments include U.S. Domestic Package and International Package. Its U.S. Domestic Package and International Package are together referred to as its global small package operations.

As per our previous US Daily Report published on ‘UPS’ on 26^th August 2024, Kalkine provided a ‘Buy’ stance on the stock at USD 128.77, based on “price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis”.

Current Macro and company specific rationales:

• Impact of U.S. and China Tariffs on Global Trade: S. tariffs, mirrored by China’s 34% tariff on all imports from the United States as announced by the official Xinhua News Agency, have escalated trade tensions, disrupted global supply chains and increased shipping costs for United Parcel Service (UPS), a major logistics provider reliant on international trade. This tariff war reduces cross-border commerce volume, a key driver of UPS’s revenue, contributing to potential declines in profitability.
• Fears of a U.S. Recession: Concerns over a potential U.S. recession have lowered expectations for consumer spending and industrial activity, which directly impacts demand for shipping and logistics services provided by UPS. A slowing U.S. economy reduces package volumes, posing risks to revenue stability and operational efficiency.
• Declining E-commerce Growth Rates: Slowing growth in the e-commerce sector, driven by market saturation and reduced discretionary spending, is affecting UPS’s core business, as online retail shipping volumes decline. This trend challenges UPS’s ability to maintain its revenue streams, creating financial pressures.
• Rising Operational Costs and Margin Compression: UPS faces increasing costs for fuel, labor, and fleet maintenance, exacerbated by global economic volatility, which squeezes its profit margins. With limited ability to fully offset these expenses through higher shipping rates in a competitive market, the company encounters heightened financial strain.

Noted below are the details of support and resistance levels provided in our previous report:

UPS’s Daily Chart 

Considering the current trading levels, volatile macro environment, tariffs increased both by US and China, breaking of key important support of USD 100.00- USD 110.00, and risks associated, a ‘Sell’ rating is assigned to the “UPS” at the closing market price of USD 97.71, as of April 04, 2025. 

Note: This report may be updated with details around fundamental and technical analysis, price/ chart in due course, as appropriate

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is April 04, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’