UPS Will Have to Work Hard to Offset Amazon Volumes Loss -- Market Talk

Dow Jones01-31

1045 ET - UPS has shown more resilience in recent quarters, but it will have to run even harder to offset the impact of cutting Amazon volumes over the next 18 months, Baird analysts Garrett Holland and Joseph Higgins say in a research note. Shedding 50% of Amazon volumes by June 2026 shows UPS focusing on profitability over volume, which is a sound long-term strategy, but one that introduces a multi-year challenge, the analysts say. They're moving to the sidelines and downgrading the stock to neutral, with expectations that it will be range bound as UPS's outlook settles. Shares are slightly lower after a 14% selloff Thursday. (dean.seal@wsj.com)

(END) Dow Jones Newswires

January 31, 2025 10:46 ET (15:46 GMT)

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Comments

  • Mat76
    02-01
    Mat76
    I think the analysts misread UPS. Reducing Amazon be volume is actually good for UPS as this segment is low margin/ high volume which occupied their existing resources. By freeing up the resources, they can divert to higher margins businesses, less cost outlay with higher margins.  I am a buyer at this price 
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