United Parcel Service, Inc. (UPS): A Bull Case Theory

We came across a bullish thesis on United Parcel Service, Inc. on Make Money, Make Time’s Substack by Oliver | MMMT Wealth. In this article, we will summarize the bulls’ thesis on UPS. United Parcel Service, Inc.’s share was trading at $107.40 as of January 14th. UPS’s trailing and forward P/E were 16.47 and 14.51 respectively according to Yahoo Finance.

United Parcel Service, Inc., a package delivery and logistics provider, offers transportation and delivery services. UPS has been trading below its 200-day moving average since July 2023, a prolonged technical setup that is increasingly being viewed as a potential reversal signal and worth closer attention. From a valuation standpoint, UPS is currently priced near the low end of the sector at roughly 15.6x next-twelve-month earnings, a discount relative to peers such as DHL at around 18x and GXO at roughly 19x, while FedEx trades at a similar multiple.

Despite this attractive valuation, the fundamental picture is mixed. Revenue growth at UPS has lagged peers, reflecting softer volume trends and a strategic transition away from its historical reliance on Amazon, which has weighed on near-term top-line momentum. Operating efficiency also appears less compelling, with gross margins sitting roughly 800 basis points below those of FedEx, highlighting cost and pricing challenges in the current environment.

That said, the quality of earnings at UPS remains a differentiating factor. Net income margins are approximately 200 basis points higher than those of both FedEx and DHL, translating directly into superior returns on equity relative to peers. This suggests that despite weaker growth and margin headwinds at the gross level, UPS continues to convert revenue into shareholder value more efficiently.

As a result, the investment case is not centered on a dramatic re-rating or a doubling of the stock. Instead, UPS offers a more defensive opportunity, suited for investors seeking to reduce portfolio beta while still targeting a reasonable 30–50% upside over time. At current levels, particularly for those cautious on the macro backdrop, UPS represents a balanced risk-reward setup rather than a high-conviction, high-upside trade.

Previously, we covered a bullish thesis on FedEx Corporation (FDX) by Daan Rijnberk in September 2024, which highlighted margin expansion, cost savings from DRIVE and Network 2.0, and valuation upside. FDX’s stock price has appreciated by approximately 5.15% since our coverage due to improving profitability and efficiency gains. Oliver | MMMT Wealth shares a similar view but emphasizes UPS’s defensive return profile and technical reversal setup.

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Disclosure: None.