UPS, or United Parcel Service, is facing some challenges this year. But it’s a blue chip stock, which means that it has a long history of reliability and stability. Should you buy the dip, or is UPS simply having trouble adapting to the new realities of the shipping and logistics world? Let’s delve deeper to find out.
What's New At UPS?
After a brief dip at the very beginning of the pandemic, UPS soared to record highs. Stuck at home and flush with stimulus cash, consumers began ordering goods online at an unprecedented rate. Now the company is facing twin challenges: The world has reopened and online sales are down across the board, plus retail in general is coping with cutbacks in discretionary spending thanks to stubbornly high inflation. As a result, UPS’ latest earnings report showed some challenges. In particular, consolidated revenue was down 5% YOY in the first quarter. UPS has been working on a turnaround, trimming its workforce and reducing costs to cope with lighter demand, but this could take some time to pay off.
What The Analysts Are Saying
Overall, the consensus among analysts is that UPS will adapt to the new realities. After all, it’s been through well over 100 years of shifting market factors, and it is currently one of the biggest shipping couriers in the world. There are definite headwinds for now, which means that short-term investors looking for fast growth should search elsewhere. But if you are in the market for a stable and reliable stock with everything it needs to weather the latest challenges, if would be smart to consider UPS. Its footing is still highly stable, and it has already started to rally in recent weeks. With shares currently trading at just 21 times trailing earnings, now may be the time to make your investment.
Neither Lisa Fritscher nor Stocks.News have positions in this company.
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Contributing Writer
Lisa Fritscher has been a contributing writer for App.Stock.News since 2024. Lisa has been interested in investing since winning The Stock Market Game in high school. In more than a decade as a professional writer, she has written consumer-facing financial information and advice articles for a wide variety of publications. She has a Bachelor of Arts in Psychology from the University of South Flori...