On Thursday, TD Cowen resumed coverage on United Parcel Service (NYSE:UPS) stock, maintaining a Hold rating with a set price target of $144.00.
The firm highlighted the ongoing adjustments both UPS and its industry peer FedEx (NYSE:FDX) are making post-COVID, as they navigate through an inflationary period and strive for network cost reductions. The commentary noted the cautious optimism surrounding the upcoming peak season for the carriers.
The resumption of coverage on UPS comes as the company's stock is trading below its forward earnings average. In contrast, FedEx is reported to be trading in line with its forward earnings. TD Cowen's continued Buy rating on FedEx indicates a divergence in the firm's outlook for the two parcel service giants.
The analyst from TD Cowen expressed that the transition from the pandemic has been a phase of normalization for carriers like UPS. The company is also contending with the pressures of inflation, which have been a central concern for many businesses in the current economic climate.
The firm's commentary suggests that while there are challenges in the market, there is also an element of positive expectation for the future. The peak season, typically a high-volume period for shipping companies, is approaching, and carriers are cautiously optimistic about the potential increase in business.
In summary, TD Cowen's coverage on UPS indicates a neutral stance with a Hold rating, while the price target of $144.00 provides a benchmark for the stock's potential value. The firm's outlook for UPS reflects a balance of the current economic challenges and the anticipated seasonal opportunities.
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