UPS Stock Misses Earnings Revenue; Teamster, Other Factors at Play

• UPS stock fell 3.83% in a month and 2.95% in six months but rallied 3.60% YTD. 
• August 8 earnings missed revenue estimates due to labor contracts and declining packages. 

United Parcel Services (UPS) stock fell 3.83% in a week, and earnings missed revenue due to the Teamster Contract and other factors. The parcel service giant’s financial outlook is fighting the decline in its global delivery volumes and the fallout from the new labor contract. All these factors are burning severe holes in the company’s finances. 

United Parcel Services Inc. (UPS Stock)- Financial Anatomy

The tentative labor contract UPS reached with Teamsters last month, which benefits its 340,000 unionized workers, dented revenue. Also, the quarter’s package volume decline made NYSE: UPS miss the estimated revenue and caused the stock price to fall around 4%. 

The cash generated from its operational activities fell by 15.11% to $3.24 Billion; from financing activities, it dropped by 8.14% to $3.59 Billion; and from its investing activities, cash flow declined by 12.84% to $1.05 Billion. Also, the revenue from domestic packages in the United States was $64.21 Billion; from international packages, it was 19.70 Billion, and its supply chain solutions generated a revenue of $16.43 Billion. 

United Parcel Services Inc. (NYSE: UPS)- Technical Analysis

At press time, UPS stock is trading at $180.55, falling 0.88%; the previous close and open were at $182.15 and $183.06, respectively. The 52-week range is from $154.87 to $184.33, meaning a solid push could create new highs. With a volume of 6.43 Million shares, the market cap is $155.072 Billion. 

The trailing twelve-month (ttm) price-to-earnings (P/E) ratio is 14.61, indicating an undervalued stock price. At the same time, the (ttm) earnings per share (EPS) are $12.36, meaning strength. Analysts gave the stock a 2.38 rating for HOLD and estimated a price target of $189.96 with a 5.4% upside. 

UPS reported its latest earnings on August 8, 2023, where the reported revenue of $22.055 Billion failed to beat the estimated $23.039 Billion by 4.27%. At the same time, the reported earnings of $2.54 per share surpassed the expected value of $2.489 by 2.07%. 

The subsequent earnings will be reported on October 24, 2023, where the revenue could be $22.287 Billion, and the earnings might be $2.212 per share. The profit margin is 10.90%, while the operating margin (ttm) is 12.94%. The (ttm) revenue is $98.89 Billion, and the year-over-year (YoY) quarterly revenue growth suffered by 6.00%. 

United Parcel Services Inc. (UPS Stock)- Candle Exploration

UPS stock traded in the previous range since previous earnings. The price did manage to break out in July 2023 but could not sustain it. The relatively flat 200 EMA acts as a support, and the price could bounce off from here. Also, if the following candle forms above the low of the previous candle, the possibility of a jump increases. 

With 50 EMA crossing 200 EMA from below, the possibility of a golden crossover appears. But confirmation will arrive after the price beats R1 at $197.90 and sustains for a while. This would make the price action strong enough to break R2 at $209.21 and create new highs. 

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