The security looks ripe for a round of downgrades and/or price-target cuts
United Parcel Service, Inc. (NYSE:UPS) narrowly beat fourth-quarter earnings expectations, while revenue of 24.9 million missed the mark. The delivery giant's full-year revenue forecast came in below analysts' estimates of $95.57 billion, amid weakened international and domestic e-commerce demand. Additionally, the company will cut 12,000 jobs and explore strategic options for truckload freight brokerage business Coyote.
UPS is down 7.9% at $145.62 at last check, but the $144 region, which rejected an October rally from three-year lows, is containing this pullback. The security is still pacing for its worst day since April 2023, however, while carrying a 17.5% year-over-year deficit and shedding 7.3% already in 2024.
Options activity is running rampant, with 56,000 puts and 36,000 calls exchanged so far, or 13 times the intraday average volume. Most popular by far is the weekly 2/2 145-strike put, where new positions are being opened.
While the brokerage bunch is already mostly pessimistic on UPS, there's still ample room for downgrades and/or price-target cuts. In fact, 10 of the 23 analysts in coverage still call the security a "strong buy," while the 12-month consensus target price of $166.63 is a 14.4% premium to current levels.