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April 9, 2020, 12:07 p.m. EDT

UPS downgraded by UBS on loss of higher-margin business

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By Claudia Assis

Analysts at UBS on Thursday downgraded their rating on United Parcel Service Inc. /zigman2/quotes/201245396/composite UPS -0.94% stock to neutral from buy, saying that headwinds from the economic collapse caused by the coronavirus pandemic are likely to cancel out the uptick in ecommerce-related deliveries. "We expect the impact of COVID-19 to drive a sharp reduction in (business-to-business) volumes with the most notable decline in UPS's highest-margin customer group of small and mid-sized businesses," the analysts said. That sharp decline in higher-margin business from small and mid-sized businesses plus the growth in business-to-consumer deliveries "could exert a significant mix/margin headwind," the analysts said. Shares of UPS have lost about 13% in the past 12 months, compared with losses around 3% for the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.24%

/zigman2/quotes/201245396/composite
US : U.S.: NYSE
$ 168.89
-1.61 -0.94%
Volume: 2.22M
Nov. 27, 2020 5:00p
P/E Ratio
32.05
Dividend Yield
2.39%
Market Cap
$147.38 billion
Rev. per Employee
$149,327
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/zigman2/quotes/210599714/realtime
US : S&P US
3,638.35
+8.70 +0.24%
Volume: 1.22B
Nov. 27, 2020 2:07p
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