On Wednesday, Evercore ISI analyst Jonathan Chappell increased the price target for UPS (NYSE:UPS) shares to $147 from $141, while maintaining an In Line rating on the stock. Chappell's adjustment reflects positive developments in key metrics that the analyst believes could lead to a higher than expected earnings per share (EPS) for the fourth quarter of 2024 and provide a stable outlook for the fiscal year 2025.
The analyst highlighted improvements in U.S. Domestic revenue, linked to Retail Sales, and International Revenue, associated with China exports. These improvements suggest a potential for the fourth quarter of 2024 EPS to surpass expectations, which could also support a reliable 2025 EPS guide that might not only be achievable but possibly exceedable.
Despite slight adjustments to the fourth quarter of 2024 EPS, now estimated at $2.54 (down from $2.56), and the fiscal year 2025 forecast, now at $8.77 (down from $8.84), due to marginally softer international pricing forecasts, Chappell noted the possibility of volume increases in both segments if recent data trends persist.
Chappell's analysis indicates that UPS stock, which has significantly underperformed since mid-2023, may recover some of its losses. A meeting or matching of fourth-quarter expectations and the fiscal year 2025 guidance could trigger a short-covering event. The addition of UPS to the Tactical Outperform list is based on these potential catalysts.
Looking forward, Evercore ISI has introduced estimates for 2026, which anticipate consecutive years of double-digit EPS growth for UPS. This long-term outlook, combined with the recent favorable data trends, has led to the revised price target of $147. UPS is expected to report its fourth-quarter 2024 earnings and provide its fiscal year 2025 guidance on January 30.
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