Can UPS snap its streaks of income misses and post-earnings inventory selloffs?

UPS shares
UPS,
-0.80%
dropped 0.8% Monday. They have rallied 14% over the previous three months, whereas shares of rival FedEx Corp.
FDX,
-1.40%
have gained 4.7% and the S&P 500 index
SPX
has superior 18.3%.

Profit hasn’t been the issue, as UPS has overwhelmed expectations for earnings per share prior to now 14 consecutive quarters.

Revenue, nevertheless, has missed expectations for the previous 5 quarters. The firm minimize its full-year income steerage in every of the previous three quarters, and offered an outlook that was under forecasts within the quarter earlier than that. (See under for Wall Street’s present consensus expectations for the fourth quarter.)

Read: UPS inventory dives to a greater than 3-year low after income misses expectations, once more.

There’s cause to fret that one other miss or outlook minimize may very well be within the works, in line with Evercore ISI analyst Jonathan Chappell. Based on his pattern evaluation, Chappell mentioned “there could be further downside to UPS U.S. domestic revenue. In addition, deceleration in China’s exports is a headwind for UPS’s international revenue.”

There have additionally been labor-related headwinds as of late that will have allowed UPS’s rivals to learn at its expense. When FedEx Chief Customer Officer Brie Carere was requested in December whether or not the corporate has been in a position to maintain on to the market share it gained whereas UPS was present process tense labor negotiations, Carere answered, “Confidently yes,” in line with an AlphaSense transcript.

Also learn: UPS blames ‘late and loud’ Teamsters talks for income miss, outlook minimize.

TD Cowen analyst Helane Becker mentioned the labor points made the fourth quarter a tricky one for UPS, as the corporate had to determine the best way to cowl the price of a brand new contract with the Teamsters union with out driving shippers to different supply corporations.

Becker reiterated her market-perform ranking on UPS’s inventory, and saved her worth goal at $175.

The following are UPS’s present common analyst estimates compiled by FactSet for some key monetary metrics, and what they had been on the finish of the third quarter.

• The FactSet consensus for earnings per share was $2.46, down from $3.62 in the identical interval a yr in the past. The EPS consensus has dropped considerably because the finish of the third quarter, when it was $3.03.
• The FactSet income consensus was $25.398 billion, down from $27.033 billion a yr in the past, and under the consensus of $26.247 billion as of Sept. 29.
• U.S. Domestic Package income is anticipated to be $17.39 billion. That compares with the consensus of $17.82 billion as of Sept. 29, and the $18.25 billion that was reported a yr in the past.
• International income is anticipated to fall to $4.64 billion, from final yr’s $4.95 billion. At the top of September, the consensus was $4.70 billion.
• The FactSet consensus for 2024 income has declined to $95.51 billion, from $98.00 billion as of Sept. 29.