UPS' Efficiency Improvements Could Deliver A Healthy Peak Season

The rise of e-commerce spending continues to spur growth for global shipping provider United Parcel Service, Inc. UPS.

"We expect the international business to continue to improve, driven by secular e-commerce growth and the company's investments in Europe," said analysts at William Blair.

Potential disruption of UPS by Amazon.com, Inc. AMZN's shipping service appears to just be a minor distraction.

"We continue to believe it will be not much more than a blip on the radar due to the density required to make e-commerce deliveries profitable on a large scale and increasingly more e-commerce activity from other retailers," William Blair continued.

Related Link: UPS Lifts Rates Ahead Of Holiday Season

The investment bank is still expecting a "decent peak season," as UPS continues to improve its route density through several initiatives. The analysts highlighted four key catalysts for UPS moving forward:

1. Peak looks healthy.
2. Internal initiatives continue to drive better density and profitability.
3. Growth opportunity in Europe.
4. Amazon not expected to have a noticeable impact, at least in the near term.

"We recommend investors purchase shares at current levels and note the Company's 3 percent dividend yield for those seeking yield," said William Blair.

William Blair has an Outperform rating on UPS.

At time of writing, UPS was trading at $108.66, up 0.94 percent on the day.

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