UPS Inc (UPS:NYE) Cowen raises target on UPS

STA Research
by: STA Research

Cowen’s analyst Helane Becker raised the firm’s  target on UPS to $114.00 from $101.00 on the basis of a positive upcoming  second quarter earnings release. It’s likely that the shipping surcharges that UPS is now charging, which commenced at the beginning of the pandemic will likely remain, and will help push revenue growth. Becker maintained their Market Perform rating.

Citigroup’s analyst Christian Wetherbee also chimed in a raised their target on UPS to $115 from $105, and maintained their Neutral rating.

STA Research(stocktargetadvsior) has a average target of $109 and a Buy rating. STA’s rview of the stock is Slightly Bullish with a score of 6.5 out of 10, where 0 is very bearish and 10 very bullish.

 

What to like:
High market capitalization
This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.
Superior risk adjusted returns
This stock has performed well, on a risk adjusted basis, compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile.
Low volatility
The stock’s annual returns have been stable and consistent compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile. Although
stability is good, also keep in mind it can limit returns.
Superior total returns
The stock has outperformed its sector peers on average annual total returns basis in the past 5 years (for a hold period of at least 12 months) and is in the top quartile.
Superior return on equity
The company management has delivered better return on equity in the most recent 4 quarters then its peers, placing it in the top quartile.
Superior capital utilization
The company management has delivered better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.
Superior return on assets
The company management has delivered better return on assets in the most recent 4 quarters than its peers, placing it in the top quartile.
Positive cash flow
The company had positive total cash flow in the most recent four quarters.
Positive free cash flow
The company had positive total free cash flow in the most recent four quarters.
Superior Dividend Growth
This stock has shown top quartile dividend growth in the previous 5 years compared to its sector
High Gross Profit to Asset Ratio
This stock is in the top quartile compared to its peers on Gross Profit to Asset Ratio. This is a popular measure among value investors for showing superior returns in the long run.

 

 

What to not like:
Below median dividend returns
The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.
Overpriced compared to book value
The stock is trading high compared to its peers median on a price to book value basis.
Overpriced on cash flow basis
The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.
Highly leveraged
The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the news and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.
Page 2 of 10 Any information in this report is not , and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action. We recommend seeking a licensed professional for investment advice.
Overpriced on free cash flow basis
The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.
Low Earnings Growth
This stock has shown below median earnings growth in the previous 5 years compared to its sector

 

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