Investor Alert

New York Markets After Hours

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

UPS downgraded by UBS on loss of higher-margin business

Analysts at UBS on Thursday downgraded their rating on United Parcel Service Inc. (NYS:UPS) 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 (S&P:SPX)

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