UPS Is Today’s Worst Stock in the S&P 500 After Slowed Amazon Shipments

Wall Street forecast slowed margins for UPS after a “large decline” in Amazon volumes. (Jean-Christophe Verhaegen / AFP via Getty Images)

A slowdown in Amazon shipments has provoked pessimism on Wall Street for UPS stock, reversing recent optimism and making it the worst performer in the S&P 500 on Monday.

Shares of UPS fell 4% to $95.04, putting them on pace for their lowest close since they hit $94.95 on March 30. FedEx stock, also among the day’s worst performers, dropped 3.2%. The index advanced 1.3%.

BofA Securities lowered its price target for UPS shares to $108 from $115 on Friday, a 9% upside from the stock’s $99.06 closing price last week. The bank’s analysts reiterated a Neutral rating for the stock and cut full-year earnings projections to $7.10 a share from $7.25 a share.

Analyst Ken Hoexter said the reduction is driven by a “sharper reduction” in domestic shipping volumes, particularly a “large decline” in Amazon shipments in the prior quarter. UPS’ full-year revenue is expected to hit $91.3 billion, down from an earlier projection of $92.5 billion, Hoexter wrote.

UPS previously issued full-year guidance for earnings of $7.22 a share and $91.2 billion in revenue, slightly higher than Wall Street’s estimates of $7.19 a share and $91.3 billion, respectively, according to FactSet.

The shipping firm’s stock is down 4% this year and 59% from its all-time closing high of $232.11, set in February of 2022, when pandemic shutdowns fueled online shopping. Rising inflation, union-backed wage increases, tariffs, and UPS’ efforts last year to c ut reliance on low-profit Amazon shipments have since weighed on the company.

Citi analyst Ariel Rosa wrote last month that he expected “better days” ahead for UPS stock, issuing a Buy rating and citing parcel demand that has been “moderately better-than-expected.” Of the 23 analysts polled by FactSet, 10 have a Buy rating and eight have a Hold rating.

Write to Ty Roush at tyler.roush@barrons.com

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