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Analysts attended a sell-side breakfast Wednesday morning with the United Parcel Service Inc (NYSE:UPS) CEO and CFO, with most of the 90-minute meeting said to be a Q&A.
Following the meeting, analysts at BofA, Morgan Stanley, and Deutsche Bank released notes:
The BofA Securities analyst maintained a Neutral rating and raised the firm’s price target on the stock to $204 from $198 following the meeting.
He said: “We remain Neutral on UPS’ shares given a decelerating consumer/economic backdrop, yet appreciate management’s capability in reaching its pulled-forward targets, aided by sustained pricing.”
Morgan Stanley’s analyst maintained an Underweight rating and $148 price target on the stock. However, the analyst said that after hosting a similar session last year, “it is good to see this may be becoming a tradition.”
“There were no material new surprises at the event and the overall tone was positive. Mgmt.’s plans are sound (esp. the technology initiatives) but we remain UW given our view of multiple headwinds including post-pandemic mean reversion, AMZN customer and competitive risk, e-commerce market evolution risk and union contract risk in 2023 (esp. in the face of continued high expectations),” he added.
Finally, a Deutsche Bank analyst explained that “the bottom line from our meeting is that UPS is operating at a very high level and implementing long-cycle, scalable initiatives that can drive real structural change. Meanwhile, FedEx (NYSE:FDX) still needs to acknowledge a need for a more dramatic operational overhaul. This is the opportunity for FedEx but also the challenge for shares.”
