Prediction: UPS Will Miss Estimates (but the Stock Could Still Be a Good Value)
UPS faces risks from fuel costs, competition from Amazon, and weak e-commerce trends.
The article discusses the potential for UPS to miss earnings estimates in the current quarter and for 2026. Several factors contribute to this uncertainty, including increased fuel surcharges and a decline in e-commerce demand. UPS raised fuel surcharges by $1.173 billion in the first half of 2026, while fuel costs and third-party fuel increased by $744 million, resulting in a net difference of $429 million.
This significant amount could pose challenges for UPS in passing through fuel surcharges without impacting volume. Additionally, Amazon Supply Chain Services, launched this year, may affect UPS volumes as Amazon prices aggressively to win small and medium-sized business deliveries. Furthermore, UPS's Global Freight Transportation and Logistics Trends report from Q3 indicates that while AI-driven demand supports the air freight sector, e-commerce demand declined by 7% year-over-year in May 2026.
This trend is concerning, as it suggests UPS could struggle to maintain its dividend, currently valued at $6.56 per share. Despite these challenges, the article suggests that UPS's stock may still be a good value if the company can meet or exceed expectations and maintain its dividend. The comparison to Delta Air Lines, which recently missed estimates and cut guidance without causing a significant decline in its stock price, supports this perspective.
The author advises waiting for the earnings report before considering buying the stock, as it may present a recovery opportunity if UPS can meet or beat expectations.
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