Investing.com -- Baird downgraded United Parcel Service Inc (NYSE:UPS) to "Neutral" on the rising impact of Amazon’s planned volume reduction, which introduces a multi-year challenge for the shipping giant.
Amazon (NASDAQ:AMZN), which accounted for nearly 12% of UPS’s total revenue in 2024, will cut its shipping volume by 50% by the second half of 2026, raising concerns over long-term profitability.
While UPS is shifting focus to higher-margin segments such as healthcare and international markets, the loss of Amazon’s business pressures revenue projections, with 2025 sales now expected to be about 6% below consensus.
“Focusing on profitability over volume growth is a sound long-term strategy, but UPS will have to run even harder to offset the AMZN impact,” analyst at Baird said
Baird expects shares to remain range-bound as the company navigates its restructuring and cost-cutting efforts.
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