UPS Video 03.05.21.
UPS Stock Continues To Move Higher After Strong Quarterly Report
Shares of UPS gained strong upside momentum after the company provided its quarterly earnings report on April 27. The company reported revenue of $22.9 billion and GAAP earnings of $5.47 per share, easily beating analyst estimates on both earnings and revenue.
The company did not provide revenue or earnings guidance for 2021 due to continued economic uncertainty, but the quarterly report indicated that the company was enjoying strong support from the continued shift to e-commerce. According to the report, shipment volumes increased by 14.3% year-over-year, which is a major development for a company of this size.
Not surprisingly, analysts rushed to update their price targets after the release of the strong quarterly report, and the stock continued to move higher. UPS stock closed near the $175 level before the release of the quarterly report, and it is currently trying to settle above $212.
What’s Next For UPS?
Analyst estimates have been updated after the strong report, and the current consensus implies that UPS will report earnings of $10.91 per share in 2021 and $11.35 per share in 2022. In this light, the stock is trading at less than 20 forward P/E for 2022 despite the recent rally.
S&P 500 is trading at record highs, and valuations look stretched in many market segments, so UPS shares have a decent chance to attract more buyers at current levels thanks to the company’s strong market position and recent growth.
It remains to be seen whether UPS will be able to grow its revenue at a fast pace once the initial boost from the pandemic is over.
At this point, traders look ready to be that current trends will stay in place in many segments. Analysts are more skeptical and expect that UPS earnings will increase by just 4% in 2022 compared to expected earnings in 2021, but estimates may change quickly if the upcoming reports show that shipments continue to grow at a robust pace.
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