UPS isn’t as popular with Wall Street analysts as FedEx. UPS truck
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Shares of FedEx and United Parcel Service were on the move Monday after picking up upgrades from Wolfe Research analyst Scott Hand, who raised his ratings for both to the equivalent of Buy from Hold.
UPS (ticker: UPS) stock was up about 3.9% in midday trading. FedEx (FD) shares were up 3.5%. The S&P 500 and Dow Jones Industrial Average, for comparison, are up 0.4% and 0.8% respectively.
Wall Street has been warming to both stocks as pricing and volumes for parcel shippers have risen throughout the pandemic. Detail’s of Hand’s upgrades weren’t available.
Right now, more than 70% of analysts covering FedEx rate shares Buy. A year ago, the Buy-rating ratio was closer to 50%. The average Buy-rating ratio for stocks in the S&P 500 is roughly 55%.
The average analyst price target is about $325, or 12% higher than recent trading levels. A year ago, the average analyst price target was about $140 a share.
UPS isn’t as popular with analysts as FedEx. Just over 50% covering the company rate shares Buy. About a year ago, about 40% of analysts rated shares Buy.
The average analyst price target is about $210, about 3% higher than recent levels. A year ago, the average analyst price target was about $100 a share.
Valuation might be a reason for the different takes. UPS is trading for roughly 19 times estimated 2021 earnings; FedEx is trading for less than 17 times.
FedEx is more popular with the Street, but UPS stock has the upper hand in 2021— and is up 24% year to date, jumping 10% on April 27 after it reported blowout first quarter numbers. FedEx stock is up about 13% year to date, similar to gains of the S&P 500 and the Dow industrials.
Both stocks had a great 2020. UPS share rose about 44%; FedEx stock gained about 72%.
Write to Al Root at [email protected]
