UPS (NYSE: UPS) reports Q2 2024 earnings on July 23, with its shares under pressure following a 12% YTD decline. Below is a brief summary of the key points that matter most and how shares might respond:
What’s Expected
Revenue: $21.8 billion (3.5% YoY down).
EPS: $1.85 (down 33% YoY).
Focus: Lackluster shipping demand, labor expenses, and global trade slowdowns.
3 Catalysts That Will Move the Stock
Volume Trends
U.S. domestic package volumes declined 3.2% in Q1. Equilibrium here would reassure investors.
Cost-Cutting Progress
The company is targeting $1 billion in savings through layoffs and efficiencies. Margins (Q1: 8% operating margin in the U.S.) must improve.
Guidance Update
Full-year goals ($92–94.5B revenue, 10–10.6% margin) can be reduced if demand weakens further.
Bull vs. Bear Scenarios
Upside Surprise (Unlikely): Volume stabilization, healthcare logistics expansion (11% higher in Q1), or improved cost control could push shares 5–8%.
Downside Risk (Probable): Another revenue shortfall, poor guidance, or margin contraction could spur a 10%+ decline toward $125.
Competition & Macro Risks
FedEx’s Agony: Reflect UPS’s volume reductions.
Amazon’s Threat: Growth in-house delivery.
Oil Prices: Above $80/barrel increases fuel prices.
Technical Outlook
Key Support:
135(heldsince2020).A
breakbelow130 jeopardizes a steeper sell-off.
Resistance: $145 (50-day moving average).
Bottom Line
UPS shares depend on whether it will be able to demonstrate cost savings overcome softening demand. Health care logistics and a low valuation (P/E 16.5) hold out promise, but conservative guidance or volume declines might exacerbate losses.
Watch For: Volume trends in the U.S., margin comments, and 2024 guidance.
High-Impact Keywords: UPS earnings preview, shipping stocks 2024, UPS layoffs, FedEx rivalry, health care logistics growth.
*Stay tuned for post-earnings commentary on July 23