Yahoo Finance Should You Investigate United Parcel Service, Inc. (NYSE:UPS) At US$169?
Let's talk about the popular United Parcel Service, Inc. (NYSE:UPS). The company's shares saw significant share price movement during recent months on the NYSE, rising to highs of US$196 and falling to the lows of US$169. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether United Parcel Service's current trading price of US$169 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at United Parcel Service’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for United Parcel Service
What's The Opportunity In United Parcel Service?
According to my valuation model, United Parcel Service seems to be fairly priced at around 14.36% above my intrinsic value, which means if you buy United Parcel Service today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $147.34, then there isn’t really any room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because United Parcel Service’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from United Parcel Service?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of United Parcel Service, it is expected to deliver a relatively unexciting earnings growth of 0.01%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? It seems like the market has already priced in UPS’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on UPS, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
So while earnings quality is important, it's equally important to consider the risks facing United Parcel Service at this point in time. For example, we've discovered 2 warning signs that you should run your eye over to get a better picture of United Parcel Service.
If you are no longer interested in United Parcel Service, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
