UPS Dips Below $94 and Has a 7% Dividend Yield: Time to Buy?
The company faces a delicate balancing act in terms of raising prices and managing volumes in the face of rising costs.
Overview
The dip in the United Parcel Service (NYSE: UPS) share price takes its dividend yield to almost 7%. That could prove to be a highly attractive entry point for passive-income-seeking investors. Still, will it prove to be a good buy, or is it a value trap?
Wall Street is divided over UPS, with Goldman Sachs recently adding the stock to its "conviction list" with a buy rating and a $132 price target. In comparison, Bank of America recently lowered its price target to $108 from $115 and kept a neutral rating on the stock, citing delivery volume concerns.
Details
The volume situation is somewhat nuanced. UPS has now completed its so-called "glide down," whereby it voluntarily reduced its delivery volume for Amazon by 50% from the start of 2025 to mid-2026. As such, the 5.7% decline in the U.S. domestic package segment shouldn't come as a surprise. On the second-quarter earnings call, CFO Brian Dykes called for "average daily volume to decline mid-single digits" in the U.S. segment, "reflecting a seasonal decline as well as the impact of this year's Amazon glide down, which completed in June."
Source
Originally published at www.fool.com.