The chart below shows the evolution of the company's forward 12-month consensus EPS estimate: Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, UPS is rated Zacks Rank #3 (Hold). Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Over the past month, the estimate has changed -2.3%. Over the last 30 days, this estimate has changed -6.4%.įor the next fiscal year, the consensus earnings estimate of $11.40 indicates a change of +5.7% from what UPS is expected to report a year ago. The Zacks Consensus Estimate has changed -5.2% over the last 30 days.įor the current fiscal year, the consensus earnings estimate of $10.78 points to a change of -16.7% from the prior year. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.įor the current quarter, UPS is expected to post earnings of $2.54 per share, indicating a change of -22.8% from the year-ago quarter.
And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. When earnings estimates for a company go up, the fair value for its stock goes up as well. Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings. Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. Now the key question is: Where could the stock be headed in the near term?Īlthough media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
The Zacks Transportation - Air Freight and Cargo industry, to which UPS belongs, has lost 8.1% over this period. Shares of this package delivery service have returned -12.4% over the past month versus the Zacks S&P 500 composite's +1.6% change. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
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