UPS Vs. FedEx: Which Stock Boasts A Higher Upside? Here's What Analysts Say

In the competitive realm of logistics and shipping, two giants stand at the forefront: United Parcel Service Inc UPS and FedEx Corp FDX. As these industry titans vie for dominance, recent developments have brought their strategies and performances into sharp focus.

Also Read: Why FedEx Stock Is Sliding Monday

UPS Secures Major Deal

UPS recently clinched a significant victory by securing a contract to become the primary air cargo provider for the United States Postal Service (USPS). This effectively ends FedEx’s 20-year partnership with the postal service provider.

USPS was the largest customer for FedEx’s air-based Express segment. However, payments to FedEx have been declining as USPS transitioned its transportation methods from planes to more cost-effective trucks, as part of operational enhancements.

Under the new contract, UPS will be handling the majority of air cargo operations for USPS, marking a substantial milestone in the company’s growth trajectory.

While specific financial terms remain undisclosed, the deal represents a strategic move for UPS to bolster its market position and expand its revenue streams.

UPS Vs. FedEx: Stock Performance & Valuation

Amidst these developments, investors are closely monitoring the financial performance of both UPS and FedEx.

Over the past year, UPS has seen its stock decline by 20.97%, while FedEx has witnessed a robust increase of 25.34%.

Data Source: Yahoo Finance

Looking ahead, analysts scrutinize various metrics to gauge future growth prospects.

In terms of forward price-to-earnings (P/E) ratio, UPS stands at 15.31, slightly higher than FedEx’s 13.24.

This metric suggests that investors may be paying a premium for UPS’s earnings compared to FedEx.

Data Source: Yahoo Finance

According to analysts, UPS holds a potential upside of 7.18%, while FedEx boasts an even higher upside of 11.2%. This reflects optimistic projections regarding the future performance and growth prospects of both companies.

As UPS and FedEx navigate through dynamic market conditions and evolving consumer demands, the air cargo showdown between these industry giants intensifies.

While UPS’s partnership with USPS signals a significant win, FedEx’s strong stock performance and favorable analyst consensus highlight its resilience and competitive prowess. As investors weigh these factors, the battle for supremacy in the logistics arena continues to unfold, shaping the future of global shipping and delivery services.

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