News

United Parcel Service  (UPS) – Get Report shares rose on Thursday after J.P. Morgan upgraded the delivery giant to overweight from neutral and raised its share-price target to $243 from $224.

The move came “after the 2021 Investor Day [Wednesday] provided incremental positives around pricing power, capacity discipline, and the dividend yield,” wrote J.P. Morgan analyst Brian Ossenbeck.

“The upgrade completes our positive bias on parcel pricing power that started in July 2020. …

“Last week we highlighted a downside bias to UPS from the investor event, and we see an attractive entry point after it underperformed the market by [7 percentage] points and broader industrials by [2 percentage] points.”

UPS recently traded at $202.92, up 0.9%. The stock has climbed 19% over the past six months. It fell 4% Wednesday on a disappointing profit margin forecast.

UPS Issues 2023 Guidance; Pledges Carbon Neutral by 2050

“We have a healthy respect for what the cycle peak can do to cyclical valuations (see our truckload downgrades from July and October 2020), but simply believe it is too early for a similar concern in parcels,” Ossenbeck said.

UPS also drew positive comments from analysts at Credit Suisse, Barclays and Deutsche Bank.

Charts That Only Threaten to Break: Real Money’s Meisler

In April, UPS delivered better-than-expected first-quarter profit, though it opted to hold back on guidance amid what it called continued economic uncertainty.

Atlanta-based UPS posted adjusted net income of $5.47 a share, tripling the FactSet analyst consensus of $1.72 a share.

UPS is a holding in Jim Cramer’s Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells UPS? Learn more now.