Key Takeaways
- United Parcel Service stock is up 18% in the past month, helped by an Oct. 27 report that beat estimates and raised its full-year outlook for a second straight quarter.
- UPS now targets about $6.1 billion of adjusted free cash flow for 2026, up from $5.5 billion, against about $5.4 billion of planned dividends.
- That gives some room to a dividend that took 99% of free cash flow over the twelve months to June 30, 2026.
- UPS looks like a buy for income, but the holiday quarter has to deliver.
United Parcel Service (UPS) stock is up 18% in the past month, while the Nasdaq 100 slid into a correction, ending Nov. 2 more than 10% below its Oct. 6 record close. UPS was climbing before its Oct. 27 report, then rose 5.8% that day after it beat estimates and raised its outlook for the second quarter in a row.
A beat, then another raise
Third-quarter adjusted EPS was $1.69, ahead of the $1.62 analysts expected, and revenue rose 6.7% to $22.9 billion. UPS now sees about $92.6 billion of 2026 revenue, up from $91.2 billion, and adjusted EPS of about $7.28, up from $7.22.
Lower Amazon volume still weighs on package counts, but U.S. revenue per piece rose 6.1% and international revenue per piece rose 15.0%. CEO Carol Tomé expects to make more money on fewer holiday packages.
Analysts’ 2026 consensus now matches the guide, and they expect 11% earnings growth in 2027:
Supply Chain Solutions, where revenue rose 18.2% on forwarding and logistics, is the newer bet. On the earnings call, Tomé said “we estimate the logistics opportunities associated with data centers alone is $15 billion,” a market estimate, not booked revenue. The segment’s adjusted operating profit still fell to $274 million from $536 million, a year-ago figure that included a one-time gain, and it took a $182 million goodwill impairment.
The dividend finally has some room
UPS paid out 99% of its free cash flow as dividends over the twelve months to June 30, a ratio with no margin for a bad year. Free cash flow came in below dividends in fiscal 2023 and 2025:
The new $6.1 billion adjusted free cash flow target leaves roughly $700 million after about $5.4 billion of planned dividends. A payout of about 89% is still high, but UPS finally has room for a soft quarter.
TIKR tracks 29 analysts on UPS. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on UPS, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See UPS’s Analyst Ratings
Is it still a buy after the run?
UPS traded at 14x forward earnings at Monday’s close, up from a five-year low of 12x in late September but below its 15x average:
The Street’s $115 average target is only about 5% higher, though Goldman Sachs ($135) and Citi ($131) see more. Barclays raised its target to $95 from $80 but kept its Underweight rating.
The raised outlook matters most for the dividend. At a yield of about 6% and a below-average multiple, UPS is a buy for income. Just don’t count on another month like this one.
The holiday quarter is the next test. UPS guided to about $3.3 billion of fourth-quarter adjusted operating profit, with results due early next year, and a shortfall there would eat into that $700 million cushion first.
So what is UPS stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what UPS could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
