Apr 08, 2020 (Market Realist via COMTEX) -- UPS /zigman2/quotes/201245396/composite UPS -2.56% stock gained in today's pre-market trading session. The stock rose over 2% in today's trading session at 10:04 AM ET. FedEx /zigman2/quotes/203047719/composite FDX -1.01% , UPS's main rival, rose 6% at the same time. The stocks rose following reports that Amazon /zigman2/quotes/210331248/composite AMZN +0.07% will suspend its delivery service, Amazon Shipping, starting in June. Amazon Shipping competes directly with FedEx and UPS customers. According to a MarketWatch report, "The WSJ report out late Tuesday, which cited people familiar with the matter, said Amazon was suspending the Amazon Shipping service, which was available in only a handful of cities, because it needed its people and capacity to handle a surge in its own customers' orders."
The Dow Jones Industrial Average rose by 92 points or 0.4% at 10:04 AM ET today. Also, the S&P 500 and the Nasdaq Composite gained about 0.5% and 0.6%, respectively. Read US Stock Market Crash: Is the Worst behind Us? to learn more.
On Tuesday, UPS stock fell 2.9% and closed at $92.91 with a market cap of $79.8 billion. UPS's stock price has fallen 0.6% in the trailing five-day period, while it has fallen 18.7% in the trailing 12-month period. The stock is trading 25.9% below its 52-week high of $125.31 on November 8, 2019. The stock is also trading 13.3% above its 52-week low of $82.00 on March 12, 2020. On a YTD (year-to-date) basis, the stock has fallen by 20.6% as of Tuesday.
Analysts' recommendations for UPS stock
As of Tuesday, 27 analysts cover UPS stock. Among the analysts, 13 recommend a "buy," 12 recommend a "hold," and two recommend a "sell." Analysts have an average target price of $109.78 on UPS. The target price implies a return of 18.2% based on the closing price of $92.91 on Tuesday. The consensus target price for the stock has fallen from $121.57 in March--a fall of 9.7%.
On Wednesday, Wells Fargo analyst Allison Poliniak-Cusic lowered his target price on UPS stock from $141 to $121 and maintained an "overweight" rating. Credit Suisse and J.P. Morgan expect FedEx and UPS stocks to react favorably to reports that Amazon is halting its Amazon Shipping service.
As of Tuesday, FedEx and Amazon have average broker target prices of $142.00 and $2413.11, respectively. These figures imply returns of 22.5% and 20%, respectively, over the next 12 months.
UPS's growth projection
UPS reported sales of $74.1 billion in 2019--a rise of 3.1% YoY (year-over-year) from sales of $71.9 billion in 2018. The company reported an adjusted EPS of $7.53 in 2019 compared to $7.24 in 2018. Wall Street analysts expected the company to report sales of $74.2 billion and earnings of $7.52 in 2019.
Wall Street analysts expect UPS to report sales of $17.5 billion in the first quarter. The figure would mark an increase of 2.1% YoY compared to $17.2 billion in the first quarter of 2019. Also, analysts expect the company to report an adjusted EPS of $1.29 in the first quarter compared to $1.39 in the first quarter of 2019. Currently, analysts expect -0.5% and 6.0% growth in the company's 2020 and 2021 revenues, respectively. Analysts also expect an adjusted EPS of $6.97 and $7.90 in 2020 and 2021, respectively.
UPS stock closed 0.8% below its 20-day moving average of $93.67 on Tuesday. However, the stock was 5.2% and 14.1% below its 50-day and 100-day moving averages of $97.96 and $108.14, respectively. The company's 14-day MACD is -1.56, which indicates a downward trading pattern. With a 14-day RSI (relative strength index) score of 47, the stock isn't overbought or oversold.
UPS has an upper Bollinger Band level of $101.23. The company's middle Bollinger Band level is $93.67, while its lower Bollinger Band level is $86.12. On Tuesday, UPS stock closed near its middle Bollinger Band level, which suggests that it isn't oversold or overbought.
Currently, UPS stock is trading at 13.34x its fiscal 2020 estimated EPS of $6.97. The stock is trading at 11.76x its fiscal 2021 estimated EPS of $7.90. Analysts expect UPS's earnings to grow at a CAGR of 5.65% over the next five years.