UPS Is Cheap For A Reason, But Might Still Be Undervalued
Summarize this article with:
Daniel Schönberger13.46K FollowersFollow5ShareSavePlay(19min)Comment(1)SummaryUPS remains slightly undervalued and a potential long-term investment despite recent operational and financial headwinds.UPS faces declining revenues, operating income, and EPS, compounded by the loss of Amazon as a major customer and ongoing restructuring costs.Dividend sustainability is at risk, with payouts exceeding free cash flow and a stretched balance sheet; a dividend cut cannot be ruled out.Valuation multiples are below historical averages, and DCF analysis suggests modest upside, but near-term sentiment and growth remain challenged. Boarding1Now/iStock Editorial via Getty Images We are coming closer to the end of fiscal 2025, and when looking at the worst-performing stocks in the S&P 500, United Parcel Service, Inc. (UPS) can be found near the lower endThis article was written byDaniel Schönberger13.46K FollowersFollowMy analysis is focused on high-quality companies, that can outperform the market over the long-run due to a competitive advantage (economic moat) and high levels of defensibility. Focused on European and North American companies, but without constraints regarding market capitalization (from large cap to small cap companies).My academic background is in sociology and I hold a Master’s Degree in Sociology (with main emphasis on organizational and economic sociology) and a Bachelor’s Degree in Sociology and History.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.