Pandemic-Fueled Deliveries Drive UPS to Earnings Beat

Year-over-year, the security sports an over 59% lead

Digital Content Manager
Feb 2, 2021 at 10:30 AM
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The shares of United Parcel Service, Inc. (NYSE:UPS) are up 5.2% at $164.40 at last check, after the delivery company reported fourth-quarter earnings of $2.66 per share -- higher than analysts' estimates of $2.14 per share -- as well as a revenue beat. The company attributed the positive results to a record number of home deliveries, as customers turned to online shopping for holiday gifts, as well as staples during the pandemic. 

On the charts, the equity has been cooling off since its late-December attempt to rally past its Oct. 21, all-time high of $178.01. While overhead pressure at the $165 level is still in place, today's pop helped the security topple its previously supportive 20-day moving average, which helped shares to record levels. Year-over-year, UPS is up 59.5%.

Analysts are mostly optimistic towards the security, with 10 of the 18 in coverage sporting a "strong buy" rating, while the the remaining eight carry a tepid "hold" or worse. Plus, the 12-month consensus target price of $173.21 is a 6.2% premium to current levels. 

More tailwinds could come in the form of a bullish shift in the options pits. This is per the security's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 79% of readings from the past year. This means puts are being picked up at a faster-than-usual clip.

Drilling down to today's options activity, 22,000 calls and more than 12,000 puts have already crossed the tape, which is four times what is typically seen at this point. Most popular is the weekly 2/5 165-strike call, followed by the 170-strike call in the same series.


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