UPS Share Price Dips Following Barclays' Sell Recommendation Due to Competition from Amazon and FedEx

Monday, 21 October 2024, 17:56

UPS share price fell sharply after Barclays issued a rare 'sell' call, highlighting risks from Amazon and FedEx competition. Analyst Brandon Oglenski downgraded UPS shares, pointing out near-term and long-term challenges affecting the shipping giant's earnings. The outlook remains grim with increasing headwinds in parcel demand.
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UPS Share Price Dips Following Barclays' Sell Recommendation Due to Competition from Amazon and FedEx

UPS Earnings Under Pressure from Amazon and FedEx

UPS shares are facing significant upside challenges as Barclays recently issued a rare 'sell' recommendation on the shipping giant. Analyst Brandon Oglenski downgraded the Atlanta-based company from equal-weight to underweight on concerns surrounding UPS earnings ahead of the third-quarter results due later this week.

Most notably, the downgrading reflects risk from a lower demand for parcels and increasing challenges from rivals like Amazon and FedEx. Oglenski's report highlighted that UPS's long-term relationship with Amazon could weaken, posing more risk to UPS shares.

Market Reaction and Future Competition

On Monday, UPS shares dropped 3.4%—the largest single-day decline in almost three months—reflecting the market's reaction to these developments. With 17 buy recommendations, 14 holds, and three sells, the average price target stands at $145. However, UPS shares have declined 16% this year amid mounting operational struggles.

  • FedEx continues to challenge UPS as it faces slowing business performance.
  • Investors are advised to consider long-term impacts of FedEx's merger and its implications on cargo productivity.
  • Potential threats from Amazon's expansive delivery network do not bode well for UPS's stability.

This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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