1 Wall Street analyst believes UPS shares are going to $ 135. Is it a purchase about $ 95?

• The UPS faces a lot of short -term headers, as its commercial environment is adversely affected by commercial conflicts.

• The company is taking strategic actions to improve long -term profitability, making actions more attractive to investors.

BMO Capital BMO’s Analyst Fadi Chamoun recently reduced their price target Ups (NYSE: UPS) Access to $ 125 from $ 130 but maintained a higher rating than shares. Although the analyst reduced the price target, it still represents 29% premium at the current price, and higher performance is de facto to a purchase recommendation.

The analyst’s reasoning makes perfect sense. Beside the advantages, the earnings of the first quarter of the UPS exceeded the expectations and the continuous reduction of low or non-margin management Amazon.com The volume of delivery, while investing in a higher margin volume, is also a long -term benefit. In addition, management plans to remove $ 3.5 billion from expenses due to its ongoing efficiency initiatives and reducing Amazon volume.

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In addition, there is no way to suppose the fact that commercial conflicts hurt transportation Companies. And the uncertain environment that surrounds the tariff conflict led to the management of the updating of investors in its entire year in the recent presentation of results.

It is a purchase if you are willing to be patient and have a tolerance for bad news. SAI can reduce their orientation if the negotiation environment does not improve and their dividend is not well covered by the cash flow. The lack of a full -year orientation update is nefarious and can cause the UPS to not have their initial orientation during the third year.

On the other hand, their strategic initiatives (for example, reducing the volume of Amazon, reducing costs, focusing on higher margin deliveries) make sense and help the company for long-term growth. As such, the higher rating makes sense: only be prepared for volatility if you buy and do not trust the dividend too much.

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