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AGING Analysis Report
Aug 11, 2026
12 days ago · 100% complete
NOT DEPENDABLE This report predates a filing — its financial basis has been replaced.
Report generated: Aug 11, 2026 · Filing on record since: Aug 19, 2026 · 8 days after
For AI assistants & researchers — machine-readable summary of this page

What this page is: Delvantic's full research page for United Parcel Service, Inc. (UPS) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.

Our current read (analysis of 2026-08-23): Designation Low · Gem Score -41 (−100…+100 Quality+Value blend) · Quality -17 · Value -60 · Sentiment 24 (timing only, not weighted) · Composite fair value $94.82 vs $104.72 at analysis

Page map (sections in order; each card carries a stable reference-name attribute you can cite):

  • profile-header / price-overview — company profile, live quote, market cap
  • extended-analysisthe core: three AI lens reads with findings, scores, and the analyst memo
  • future-predictions — our forward price-band predictions
  • market-narrative / ai-findings / gpt-critique — narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)
  • Members-only sections (render as login gates for anonymous readers): price-history, income-trend, key-metrics, financials (statement tables), insider-trading. The analysis above is public; the raw data tables require a free account.

More for machine readers: site briefing at /llms.txt · any ticker resolves at delvantic.com/stock/TICKER · raw inputs are public-company filings and market data (via licensed data feeds); every model, score, lens read, and prediction on this page is Delvantic's own analysis.

United Parcel Service, Inc.

UPS NYSE
Industrials · Integrated Freight & Logistics
Atlanta, GA 30328, United States ups.com Updated Aug 11, 12:01am
Price
$104.72
Market Cap
$89.1B
Employees
460,000
Beta
1.04
Avg Volume
5,139,950
Last Dividend
$6.56
CEO
Ms. Carol B. Tome

United Parcel Service, Inc. is a global logistics and package delivery company that provides transportation, distribution, and supply chain services to businesses and consumers worldwide. Headquartered in Atlanta, Georgia, it operates extensive networks of ground vehicles, aircraft, and sorting facilities that support time-definite delivery of letters, documents, parcels, and palletized freight. The company’s U.S. Domestic Package operations focus on express and ground services across the United States, while its International Package segment serves customers in Europe, Asia, the Indian sub-continent, the Middle East, Africa, Canada, and Latin America. United Parcel Service, Inc. also offers supply chain solutions, including freight forwarding, contract logistics, and specialized services for healthcare, retail, and industrial clients, helping them manage inventory, transportation, and fulfilment more efficiently. Operating today in the Industrials sector and the integrated freight and logistics industry, United Parcel Service, Inc. plays a central role in global commerce by enabling reliable parcel delivery and end-to-end logistics solutions across a broad range of markets.

Runs with full report Generated: Aug 11, 2026 12:41am
Price Overview
Price at report time
$104.72
as of Aug 11, 12:41am (12d ago)
Change · Aug 11
+0.22 (+0.21%)
Day Range
$103.72 – $104.87
52-Week Range
$82.00 – $122.41
50-Day MA
$109.22
200-Day MA
$103.92
Volume
3,313,592.00
Right now · live
Log in to get the live feed
Members see the real-time price and the move since this report (over 12d).
Share Structure
Outstanding 850,900,000.00
Float 741,030,758.00
Free Float 87.1%
High free float — 87.1% of shares trade freely, ~12.9% held by insiders/institutions
Very liquid — most shares trade freely. Low insider ownership can mean less management alignment, but makes large position sizing straightforward.
Price History (1 Year)
Last updated: Aug 11, 2026 12:51am (12d ago)
Revenue & Net Income Trend
The directional story — useful even when net income is negative.
Last updated: Aug 6, 2026 6:40am (17d ago)
Revenue
The top line — total sales before any costs or taxes are subtracted. A measure of how much business the company is doing.
Net Income
The bottom line — profit left after subtracting all expenses, interest, and taxes from revenue. Reflects accounting profitability, but includes non-cash items like depreciation, so it isn't the same as cash earned.
Operating Cash Flow
The real cash generated by the day-to-day business — selling products, paying suppliers, collecting from customers. Calculated from net income by adding back non-cash items and adjusting for timing (unpaid bills, unsold inventory). When OCF consistently lags net income, the reported profit may not be converting to real money.
Period Revenue Net Income Net Margin YoY/QoQ
Key Metrics
TD Twelve Data statement HEX SEC filing
Industry comparison last run: Aug 11, 2026 12:18am
P/E Ratio (Price per dollar of earnings)
HEX
Stock Price / EPS (Diluted)
15.96
Stock Price: $104.72
EPS (Diluted): 6.56
P/B Ratio (Price vs net asset value)
HEX
Stock Price / Book Value Per Share
5.48
Stock Price: $104.72
Total Equity: $16.26B
Shares: 850,000,000
EV/EBITDA (Total value vs operating profit)
HEX
Enterprise Value / EBITDA
8.18
Market Cap: $89.09B
Total Debt: $24.19B
Cash: $5.89B
EBITDA: $10.87B
Enterprise Value (Takeover price (cap + debt - cash))
HEX
Market Cap + Total Debt - Cash
$88.9B
Market Cap: $89.09B
Total Debt: $24.19B
Cash: $5.89B
Gross Margin (Revenue left after direct costs)
HEX
Gross Profit / Revenue
Gross Profit: N/A
Revenue: $88.66B
Missing from API: Gross Profit
Operating Margin (Revenue left after all operations)
HEX
Operating Income / Revenue
8.9%
Operating Income: $7.87B
Revenue: $88.66B
Net Margin (Revenue left as actual profit)
HEX
Net Income / Revenue
6.3%
Net Income: $5.57B
Revenue: $88.66B
ROE (Profit from shareholder equity)
HEX
Net Income / Total Equity
34.3%
Net Income: $5.57B
Total Equity: $16.26B
ROIC (Profit from all invested capital)
HEX
NOPAT / Invested Capital
17.7%
Operating Income: $7.87B
Tax Rate: 22.2%
Equity: $16.26B
Total Debt: $24.19B
Cash: $5.89B
Current Ratio (Can it pay short-term bills)
HEX
Current Assets / Current Liabilities
1.22
Current Assets: $19.05B
Current Liabilities: $15.62B
Debt/Equity (Leverage — debt vs equity)
HEX
Total Debt / Total Equity
1.49
Short-Term Debt: $608.00M
Long-Term Debt: $23.59B
Total Debt: $24.19B
Total Equity: $16.26B
Rev/Share (Top-line per share)
HEX
Revenue / Shares Outstanding
$104.31
Revenue: $88.66B
Shares: 850,000,000
Book Value/Share (Net assets per share)
HEX
(Total Assets - Total Liabilities) / Shares
$19.12
Total Equity: $16.26B
Shares: 850,000,000
FCF/Share (Real cash generated per share)
HEX
(Operating Cash Flow + CapEx) / Shares
$5.61
Operating CF: $8.45B
CapEx: -$3.69B
Shares: 850,000,000
CapEx is negative (outflow) — added to OCF to get FCF
Div Yield (Annual income from holding)
TD
Last Annual Dividend / Stock Price
6.3%
Last Dividend: $6.56
Stock Price: $104.72
Payout Ratio (Earnings paid out as dividends)
HEX
Dividends Paid / Net Income
96.9%
Dividends Paid: -$5.40B
Net Income: $5.57B
Industry Benchmarks
Last run: Aug 11, 2026 12:18am
Compares UPS against LLM-researched typical ranges for its industry. One research call per industry, cached indefinitely — every stock in the same industry reuses the same baseline.
Income Statement (Annual)
Last updated: Aug 6, 2026 6:40am (17d ago)
Metric 2021 2022 2023 2024 2025
Revenue $97.3B $100.3B $91.0B $91.1B $88.7B
Cost of Revenue
Gross Profit
Operating Expenses $84.5B $87.2B $81.8B $82.6B $80.8B
Operating Income $12.8B $13.1B $9.1B $8.5B $7.9B
Net Income $12.9B $11.5B $6.7B $5.8B $5.6B
EBITDA $11.9B $11.5B $10.9B
EPS $14.75 $13.26 $7.81 $6.76 $6.56
EPS (Diluted) $14.68 $13.20 $7.80 $6.75 $6.56
Balance Sheet (Annual)
Last updated: Aug 6, 2026 7:38am (17d ago)
Metric 2023 2024 2024 2025 2025
Cash & Equivalents $3.2B $6.1B $5.9B
Total Current Assets $19.4B $19.3B $19.0B
Total Assets $70.9B $70.1B $73.1B
Current Liabilities $17.7B $16.4B $15.6B
Long-Term Debt $22.0B $21.0B $23.6B
Total Liabilities $53.5B $53.3B $56.8B
Total Equity $17.3B $16.7B $16.3B
Retained Earnings $21.1B $20.9B $20.2B
Cash Flow (Annual)
Last updated: Aug 6, 2026 6:40am (17d ago)
Metric 2021 2022 2023 2024 2025
Operating Cash Flow $15.0B $14.1B $10.2B $10.1B $8.5B
Capital Expenditure -$4.2B -$4.8B -$5.2B -$3.9B -$3.7B
Free Cash Flow $10.8B $9.3B $5.1B $6.2B $4.8B
Acquisitions (net) -$602.0M -$755.0M -$1.3B -$71.0M -$2.0B
Net Debt Issued / (Repaid) -$2.8B -$2.3B $1.0B $298.0M $2.1B
Dividends Paid -$3.4B -$5.1B -$5.4B -$5.4B -$5.4B
Stock Buybacks -$500.0M -$3.5B -$2.3B -$500.0M -$1.0B
Net Change in Cash $4.3B -$4.7B -$2.4B $2.9B -$225.0M
Growth Trends (YoY %)
Last updated: Aug 6, 2026 6:40am (17d ago)
Metric 2022 2023 2024 2025
Revenue Growth +3.1% -9.3% +0.1% -2.6%
Gross Profit Growth
Operating Income Growth +2.2% -30.2% -7.4% -7.1%
Net Income Growth -10.4% -41.9% -13.8% -3.6%
EBITDA Growth -4.0% -5.2%
Dividend History (Last 20)
Last updated: Aug 7, 2026 12:05am (16d ago)
Date Dividend Declaration Record Payment
2026-05-18 $1.64
2026-02-17 $1.64
2025-11-17 $1.64
2025-08-18 $1.64
2025-05-19 $1.64
2025-02-18 $1.64
2024-11-18 $1.63
2024-08-19 $1.63
2024-05-10 $1.63
2024-02-16 $1.63
2023-11-10 $1.62
2023-08-11 $1.62
2023-05-12 $1.62
2023-02-17 $1.62
2022-11-10 $1.52
2022-08-12 $1.52
2022-05-13 $1.52
2022-02-18 $1.52
2021-11-19 $1.02
2021-08-20 $1.02
0Company Classification 1Industry Landscape 2Company Momentum 3Forward Projection 4aDCF Valuation 4bEarnings Power Value 4cAnchored PE 4dReverse DCF 4eRevenue-Based DCF 4fAnchored P/S 4gScenario Analysis 4hDividend Discount Model 4iBook Value Analysis 4jInsider Activity 4fCash Flow Quality 4gDebt Maturity Risk 4hMacro Environment 4iSector Intelligence 4jRevenue Confidence 4kSensitivity Analysis 4lSector Demand Cycle 5AI Investigation 5bThesis Evaluation 6Valuation Synthesis
computed not applicable not yet run 17 computed · 6 not applicable · 1 not yet run
Risk : Reward — if the last quarter repeats
Live · as of 2026-08-19 11:14
-0.3 : 1 recovery upside vs repeat-quarter downside
Even the bull case prices 20% below today — the ratio here measures the model-vs-market gap, not payoff odds. Another quarter like the worst recent one costs 68%.
CaseGrowthMarginFair valuevs price ($104.72)
Bull — recovery +2% 9.2% $83.73 -20%
Base — stabilizes +1% 8.0% $72.12 -31%
Bear — keeps slipping +1% 6.8% $60.97 -42%
Stress — last quarter repeats +8% 2.5% $33.00 -68%
The next quarters keep the trajectory of the worst recent matched quarter (ending 2026-06-30) — growth stays at 7.6% and margins bend by the same profit-vs-revenue ratio (×0.50). Stress is a trajectory, not a prediction — it answers "what if the ship's current heading simply continues," which history says is the case to respect.
Why this is appearing: this company files quarterly, so its recent trajectory could be measured rather than assumed — the engine matched Jun 2026, Mar 2026 against the same quarters one year earlier and found revenue +3.0% · operating income -37.0% · net income -40.6% year-over-year. That measured heading is what the stress case extends forward. Of those, the stress case extends the worst matched quarter — the one ending Jun 30, 2026 (revenue +7.6%, operating income -49.0% YoY) — not the average. Data measured through Jun 30, 2026 — this card recalculates automatically when the next quarterly filing is ingested. Companies without quarterly filings (many foreign listings) never show this card: with no measured trajectory, there is nothing honest to repeat.
Narrative Economics
The story the market is telling about this stock — the intangible X-factor (founder mythology, cult dynamics, TAM-of-imagination) that moves price beyond what cash flows alone explain. After Shiller, Narrative Economics.
No narrative profile yet for UPS — it's generated by the pipeline (market-narrative step).
AI Lens 4th lens · how AI reaches this business · 5-yr
2026-08-11
The creme is there an opportunity here? Neutral
AI cannot disintermediate a truck, but it also cannot fix UPS's real problem - yield - so this is a cost-story name, not an AI-winner name.
Exposure is genuinely low-to-moderate at 41 and position only mildly favorable at 54: the physical network is insulated (need persistence 88, scarcity migration 76) while the pressure lands entirely on ai_margin_conversion at 57 with the highest relevance in the sheet, 88. The unlock is a visible operating margin inflection back above 10% on flat volume - that would prove AI-sourced cost is being retained rather than handed to shippers as it plainly was between 2021 and 2025 when margin fell from 13.2% to 8.9%. Watch revenue per piece against cost per piece before anything else; if both fall together, the automation narrative is funding customers, not owners.
54
AI Position
Mildly favorable - physical network insulated, AI helps cost not price
AI cannot move a package, so UPS is structurally insulated on demand but only modestly advantaged: cheap intelligence trims routing, sort, and back-office cost while doing nothing to defend the per-parcel price that is actually eroding.
Exposure 41 Confidence 66 50 = neutral
Primary Tailwind

AI-driven network density optimization - dynamic routing, load planning, sort automation, and predictive maintenance - attacks the largest cost lines (labor, fuel, aircraft utilization) in a business where operating margin has fallen from 13.2% to 8.9% in four years, so even 100bps of AI-sourced cost recovery is material to earnings.

Primary Pressure

Cheap intelligence lowers the coordination cost of building alternative delivery networks: shippers, regional carrier consortia, and Amazon-style in-house fleets can now orchestrate multi-carrier, multi-leg routing with software rather than with UPS's proprietary planning stack, which turns UPS into a commodity capacity supplier priced on the margin.

Critical Hinge

Whether AI accrues to UPS as retained margin or is competed away into lower yield per parcel - the observable is revenue-per-piece versus cost-per-piece disclosed by segment, and whether operating margin inflects above 10% while volume stays soft.

Hard to Reproduce

The physical asset base is the moat: 1,800-plus facilities, aircraft fleet, air rights and international customs authorizations, last-mile density, and a unionized labor contract that is a cost but also a barrier no AI-native can assemble.

Forensic fingerprint same 11 factors for every stock · 0 unfavorable · 50 neutral · 100 favorable
Underlying Need Persistence do people still need this at all? 88
Physical goods must still be moved regardless of how cheap intelligence gets.
The need is atoms in motion, not information processing; AI can shift what is ordered and when, but not the requirement for a vehicle at a door. Only marginal erosion where documents or physical media give way to digital delivery.
parcel volume per capita trend · document and letter mix decline · e-commerce unit growth versus GDP
relevance 72 · confidence 90
Solution Persistence will they still solve it this way? 62
Parcels will still move by truck and plane, but not necessarily on UPS's network.
The solution form survives; the specific intermediary is the question, as AI-orchestrated multi-carrier and shipper-owned fleets substitute for a single integrated network. UPS is already ceding share while the industry grows 2.7%.
US Domestic volume share trend · Amazon insourced volume ratio · regional carrier consortium formation
relevance 78 · confidence 68
Intelligence Commoditization does cheap AI power them or copy them? 58
Cheap AI powers UPS's routing and sort economics but also arms every rival planner.
UPS's proprietary ORION-class optimization was a durable edge when planning software was expensive; commodity intelligence narrows that gap while giving UPS a cheaper path to labor-hour reduction across a 500k-person workforce.
cost per piece year over year · hours per package metrics · third-party routing software adoption
relevance 66 · confidence 63
Responsibility Transfer are they paid to take the blame? 74
UPS is paid to own delivery liability, customs compliance, and cold-chain integrity.
Guaranteed windows, claims, dangerous-goods handling, customs brokerage, and pharma temperature compliance are blame-absorption services no shipper wants to internalize even with capable AI. This shields the premium tiers, not ground commodity parcels.
healthcare logistics revenue growth · customs brokerage volume · service guarantee claims ratio
relevance 58 · confidence 70
Scarcity Migration do their assets get rarer or more common? 76
As software becomes abundant, physical density and air capacity become relatively scarcer.
AI raises the value of the one thing it cannot generate - last-mile density, sort throughput, aircraft and international authorizations - which is exactly UPS's asset base. The offset is that scarcity is shared with FedEx, USPS, and Amazon.
capacity utilization in air network · facility automation percentage · competitor capacity additions
relevance 85 · confidence 78
Customer DIY Preference will customers just build it themselves? 48
Large shippers increasingly want to own the delivery function, and AI lowers the entry cost.
Amazon proved a retailer can insource; cheap orchestration intelligence extends that logic to the next tier of large e-commerce shippers who previously lacked planning capability. Small shippers will never insource.
top-10 customer volume concentration · retailer in-house fleet announcements · SMB versus enterprise revenue mix
relevance 74 · confidence 64
AI Intermediation Position do AI agents go through them or around them? 52
Agents will book shipping - the open question is whether they book UPS or the cheapest slot.
If AI purchasing agents optimize on price alone, UPS becomes a spot capacity vendor; if they optimize on guaranteed windows and automated exception handling, UPS's API and reliability data make it the default rail.
API-originated shipment share · marketplace rate-shopping penetration · contract versus spot pricing mix
relevance 70 · confidence 58
Data Leverage does their data make AI better? 61
Decades of route, address, and delivery-outcome data is genuinely useful but not exclusive.
UPS's delivery-outcome and address-quality data improves its own ETA and routing models, but FedEx, USPS, and Amazon hold equivalent corpora, so the data is a parity asset rather than a differentiator.
ETA accuracy versus peers · data monetization or insight products · Network Planning Tools disclosed savings
relevance 55 · confidence 60
AI Margin Conversion do the AI savings become profit? 57
The whole thesis rides on whether AI-sourced cost savings stay with UPS or are given to shippers.
Operating margin has compressed from 13.2% to 8.9% since 2021 despite existing automation programs, which suggests savings have historically been passed through in a price-competitive duopoly-plus-Amazon market.
operating margin inflection above 10% · revenue per piece versus cost per piece · announced rate increase realization rate
relevance 88 · confidence 60
Revenue Unit Durability does the thing they charge for survive? 56
The per-parcel unit survives but its price is the pressure point AI does not defend.
AI does not reduce the number of parcels, so the unit persists; but automated rate shopping and shipper-side optimization compress yield per unit, and revenue has fallen from $100B to $88.7B while the industry grew.
revenue per piece by segment · surcharge and accessorial revenue · weight and dimension mix shift
relevance 80 · confidence 66
Entrant Compression how easily can newcomers copy them? 66
Software got cheap; trucks, planes, unions, and hubs did not.
Capital intensity and labor contracts still block de novo national entrants, but AI meaningfully lowers the barrier for regional-carrier aggregation into a virtual national network stitched together by software.
regional carrier aggregation platforms · new entrant national coverage claims · capex per unit of capacity industry-wide
relevance 68 · confidence 72

AI Lens thesis

UPS is hired to physically move a parcel from A to B with a time guarantee; that need and that solution both survive cheap intelligence intact, because the scarce assets are trucks, planes, sort capacity, and route density rather than information processing. AI therefore reaches UPS almost entirely through the cost line and the intermediation layer, not through demand destruction. On cost, the opportunity is genuine and large: labor is the dominant expense, and AI-assisted routing, volume forecasting, dynamic sort staffing, automated customs classification, and self-service support directly reduce hours per piece - this is the Smart-Facility thesis with an intelligence multiplier. On the other side, AI erodes UPS's historical informational advantage in network planning and makes shipper-side optimization software good enough to arbitrage carriers piece by piece, which pressures the monetized unit - price per parcel - and accelerates the shift of UPS from chosen partner to interchangeable capacity. The company is also already losing share while the industry grows, so any AI-enabled cost win must be judged against whether it is handed straight to customers as lower yield.

Thesis breaker If two or three consecutive years show operating margin recovering toward 11-12% on flat or declining volume, the cost-retention read is confirmed; if revenue-per-piece declines while cost-per-piece also declines, AI is being competed away and the favorable read is wrong.
What the market may be underestimating

Upside Agentic commerce could concentrate rather than fragment shipping: if AI purchasing agents optimize for guaranteed delivery windows and automated claims resolution, the carrier with the best machine-readable API, tracking data, and liability guarantee becomes the default execution rail, and UPS's healthcare and customs-brokerage franchises are the highest-value versions of that.

Downside AI-optimized shipper software makes rate shopping continuous and automatic, stripping the inertia and contract stickiness that has historically let UPS hold announced general rate increases - a slow, invisible compression of yield rather than a visible loss of accounts.

Outcome range spread 39

33Bear case
54Central case
72Bull case
Three headline numbers, deliberately never blended: Position (which way), Exposure (how much it matters at all), Confidence (how sure). The fingerprint asks every stock the same 11 questions so companies a sector label would lump together get told apart. Not an input to GEM/Coal or the Q/V/S lenses.
Claude Reading
Independent analyst synthesis · claude-opus-4-7 · generated 2026-08-11 00:50:20
Verdict Overvalued with dividend risk underpriced — fair value $70-80 assuming a payout reset and $4.50 normalized EPS; synthesis's $88 is too generous given the Q2'26 margin collapse to 2.6%.

The raw trajectory here is worse than the "mature earner at 16x" framing suggests. Revenue has gone from $100.3B (2022) to $91.1B (2024) to $88.7B (2025), and the two most recent quarters — Q1'26 at $21.20B and Q2'26 at $22.83B — are down from $21.55B and $22.25B in the year-ago comparable, meaning the decline is accelerating, not stabilizing. More alarming: Q2'26 net margin collapsed to 2.6% ($604M NI on $22.83B) versus 6.0% a year prior. That's not "cyclical softness" — that's a 340bp margin evaporation in a single quarter, which if annualized wipes out roughly $3B of net income against a $5.57B 2025 base. The synthesis's $88 signal-adjusted fair value may itself be too generous if Q2'26 margins are the new run-rate rather than an aberration.

The dividend is the crux and the models are underweighting the risk. Payout ratio is 96.9% on 2025 earnings of $5.57B; FCF was $4.77B against a dividend obligation that at $6.56/share on ~850M shares runs ~$5.6B annually. That's already negative coverage on FCF before considering that TTM earnings are deteriorating. The 6.26% yield isn't a "floor" — it's a market signal that a cut is being priced with non-trivial probability. Debt-to-equity of 1.49x with $24.2B total debt against $16.3B equity leaves limited room to defend the dividend via leverage without credit rating consequences. The "steady-compounder" narrative label is generous; this looks more like a dividend-at-risk industrial in the mold of pre-cut IBM or pre-cut AT&T setups.

Where I partially disagree with the prior models: the Pre-Flight thesis and Market Narrative both treat the 32% drawdown as potentially over-discounted, and the synthesis lands at "fully priced" with -15.5% downside. I think that understates the tail. If 2026 earnings normalize at, say, $4.00-4.50/share (down from $6.50-ish TTM) given the Q1-Q2'26 trajectory, then 15x puts fair value at $60-68, not $88-97. The bull case requires believing the Amazon insourcing headwind is transitory and the Teamsters cost step-up gets offset by automation — but there's zero evidence in the numbers yet. Operating income has gone $13.1B → $9.1B → $8.5B → $7.9B over four years. That's a franchise in structural decline, and the Market Forces "deteriorating franchise" call is the most honest read of the tape. The narrative layer's "18% story premium" seems roughly right in direction but possibly too small — I'd argue closer to 25-30% of the current price is defensive-yield story that unwinds if the dividend is trimmed.

A careful contrarian would note: (1) UPS has weathered cycles before and the 2021-2022 numbers show what peak earnings power looks like ($12-13B operating income) — if global freight recovers and Amazon insourcing plateaus, mean-reversion math is powerful; (2) EV/EBITDA of 8.2x is not expensive for an infrastructure asset with irreplaceable network density; (3) insider/buyback capacity exists once the payout is right-sized. But the contrarian case requires a catalyst — either a dividend reset that resets expectations, a volume inflection, or a margin surprise — and none is visible in the Q2'26 print. I dissent modestly from the synthesis: I think $88 fair value is optimistic given the margin trajectory, and the real risk-adjusted fair value is $70-80 assuming a dividend trim to a 60-70% payout and 2026 EPS of $4.50. At $104.72, that's 20-30% downside, not 15%. The stock is not a screaming short because the yield attracts sticky capital and any positive Q3 print reverses sentiment fast, but new money here is buying a deteriorating P&L at a price that requires you to believe the last two quarters are noise.

GPT Reading
Independent reading · gpt-5.4 · generated 2026-08-11 00:50:35
Verdict Overvalued at $104.72 — fair value is closer to $85-$95 unless margins recover quickly; the dividend is support, not a thesis.

UPS at $104.72 looks expensive for what the business is currently earning. The headline multiple of ~16x earnings flatters the situation because the earnings base has been eroding for several years: revenue peaked at $100.3B in 2022 and is down to $88.7B in 2025, while net income has been cut from $11.6B to $5.6B. That is not a temporary wobble in one bad quarter; it is a three-year compression in both scale and profitability. Operating income has slid from $13.1B in 2022 to $7.9B in 2025, taking operating margin from roughly 13% to 8.9%. The more recent quarterly run rate is worse still. First-half 2026 revenue was $44.0B versus $42.8B in first-half 2025, so sales are not collapsing, but net income was only $1.47B versus $2.47B, a roughly 40% drop. Q2 2026 margin of 2.6% on $22.83B of revenue is especially ugly for a company that needs enormous fixed-cost absorption to work.

That is the core issue: the stock is being treated like a stable yield vehicle while the income statement is showing a structurally lower-earning business. The 6.3% dividend yield looks attractive until you compare it with a 96.9% payout ratio on annual earnings and $4.77B of free cash flow against a market cap of $89B. On price-to-FCF, this is around 18-19x for a business with negative revenue CAGR, negative earnings CAGR, and rising evidence of margin stress. Debt is manageable for an investment-grade industrial, but $24.2B of debt against $5.9B of cash and only $16.3B of equity leaves less room for prolonged disappointment than the “defensive” label implies. Even the apparently strong ROE of 34% is not a sign of great economics here; with modest equity and meaningful leverage, it overstates underlying business quality. If I anchor on normalized earnings power, I do not see a credible case for paying over 1x sales and about 8.2x EV/EBITDA unless margins clearly recover. Right now they are moving the other way.

What stands out to me is that revenue is actually fairly steady, but profit conversion is deteriorating quarter by quarter. That suggests this is less a demand story than a cost/mix/competitive story. Annual revenue from 2023 to 2025 barely moved from $91.0B to $88.7B, yet net income fell from $6.7B to $5.6B and now the TTM path implied by 2026 quarters points lower again. In other words, UPS has not lost the business outright; it has lost the economics of that business. For a network operator, that is a more serious warning sign than a cyclical dip in package counts. The market may be hoping for an eventual margin snapback through pricing, automation, and network optimization, but the latest half-year numbers do not show that. At $104.72, investors are paying as if 2025 was trough-ish, while 2026 is so far arguing that 2025 may have been too optimistic.

The best pushback is straightforward: this is still a huge cash-generating franchise with durable scale, over $8.4B of operating cash flow, nearly $4.8B of free cash flow, and valuation metrics that are not extreme for a dominant logistics asset. At roughly 1.0x sales and 8.2x EV/EBITDA, UPS is not priced like a glamour stock, and if margins merely stabilize around 2025 levels the stock can work fine, especially with a 6%+ yield paying investors to wait. The quarterly revenue line also argues that the franchise is more resilient than the bears admit: Q2 2026 revenue of $22.83B was up from $21.22B a year earlier, and Q1 2026 was only modestly below Q1 2025. A bull would say the ugly first-half earnings reflect transient cost resets, not permanent impairment, and that any return toward even 10% operating margins would make today’s P/E look cheap. I weigh that less heavily because there is no evidence yet of that recovery; the burden of proof is on the turnaround, not on skepticism.

What would change my mind is simple and measurable. If UPS can show two consecutive quarters with operating and net margin rebuilding meaningfully—say quarterly net margin back above 6% and a clear path to annual operating income above $9B again—then the current price would look more reasonable. I would also want to see free cash flow hold above $5B without relying on squeezing capex too hard, because underinvestment in the network would only defer the problem. On the other hand, if the next two quarters continue the 2026 pattern of low-single-digit revenue growth with margins stuck in the 3%-4% range, then the market will have to stop valuing UPS as a stable compounder and start valuing it as an ex-growth industrial with a stressed payout. In that case, a price beginning with an 8 or low 9 feels more appropriate than $104.

Grok Reading
Independent reading · grok-4.5 · generated 2026-08-11 00:51:13
Verdict Overvalued at $104.72 — fair value nearer $88–95 until margins stabilize; 6.3% yield is stretched by 97% payout on falling NI

The numbers tell a story of a franchise in structural earnings compression, not a temporary soft patch. Annual revenue has slid from $100.34B in 2022 to $88.66B in 2025, a −1.3% CAGR, while net income has collapsed from $11.55B to $5.57B over the same span—an earnings CAGR of roughly −9%. The quarterly sequence is worse: operating and net margins that held in the 5.5–7.3% range through 2025 have cratered to 4.1% in Q1 2026 and 2.6% in Q2 2026, with net income of just $604M on $22.83B of revenue. Trailing-twelve-month earnings from the four most recent quarters sum to roughly $4.57B, which at an $89B market cap implies a mid-to-high teens multiple on still-falling profits—not the 16x the annual snapshot advertises. Free cash flow of $4.77B against $3.69B of capex remains real, but a 96.9% payout ratio on a 6.3% dividend yield means the income story is already consuming nearly every dollar of reported earnings. Debt of $24.2B against $16.3B of equity and only $5.9B of cash leaves limited room if volumes or pricing keep deteriorating.

What stands out is the gap between the “mature earner / steady compounder” archetype and the actual trajectory. ROE at 34% looks impressive until you notice how thin the equity base is and how much of the return is financial leverage rather than operating excellence; ROIC of 17.7% is still respectable, but operating margin has compressed to 8.9% annually and is running far lower on a recent-quarter basis. EV/EBITDA of 8.2x and a price-to-sales of 1.0x are not screaming expensive in isolation, yet they are being applied to a business whose revenue, earnings, and FCF are all in multi-year decline (−3.2% FCF CAGR). The prior valuation synthesis putting composite fair value near $88–$98 versus $104.72 is directionally correct: the market is still paying a modest premium for a recovery that the last six quarters have not delivered. Amazon’s logistics build-out and post-Teamsters labor cost structure are visible in the margin line, not just in the narrative layer.

The strongest case against this read is the cash generation and the yield floor. Operating cash flow of $8.45B and FCF of $4.77B are not trivial; the business still converts revenue into cash at a high rate, current ratio sits above 1.2, and a 6.3% dividend attracts passive and income capital that can stabilize the stock even when fundamentals soften. EV/EBITDA near 8x and P/E near 16x are not bubble multiples for a network-effect logistics operator, and if automation and network redesign restore even 150–200 bps of margin, earnings power rebounds quickly off the depressed base. A smart opponent would also note that 2022 was an anomalous pandemic peak, so comparing to that year overstates the secular decline, and that e-commerce and cross-border volumes remain structural tailwinds if UPS simply stops losing share. I weigh those points, but they do not override two consecutive quarters of sub-3–4% net margins and a payout ratio that leaves almost no coverage cushion if NI stays near the recent run-rate.

Margin recovery in the next two reported quarters back toward the mid-5% net range, or a clear sequential stabilization in revenue above the low-$22B quarterly level with guidance that implies full-year earnings reacceleration, would force a reassessment. A sustained drop in the payout ratio below ~80% driven by earnings growth rather than a dividend cut, or concrete evidence that UPS is recapturing Amazon-related or small-package density without further price sacrifice, would also flip the skew.

Big-3 Panel — where each AI stands
Each AI above independently stated a direction (undervalued, fairly valued, or overvalued) and how strongly it believes it (conviction, 0–5). We combine those into a Bull-Bear Index on a 0–10 scale: 5 is neutral, 10 is maximum bullish (undervalued at full conviction), 0 is maximum bearish. We compute the score ourselves with the same arithmetic for every seat — the models never grade their own bullishness — so the three are directly comparable. Δ shows how far each seat sits from the panel average of 1.3; a large Δ marks the dissenting voice, usually the one worth reading.
Claude claude-opus-4-7 2.0
overvalued · conviction 3/5 · Δ +0.7 vs panel · self: 3.0
GPT gpt-5.4 1.0
overvalued · conviction 4/5 · Δ -0.3 vs panel · self: 3.0
Grok grok-4.5 1.0
overvalued · conviction 4/5 · Δ -0.3 vs panel · self: 3.0
Advanced Analysis Forensic deep-dive · separate lenses
Separate reads — Company Quality (is it a great business?), Valuation (is it mispriced?), and General Sentiment (how macro + narrative are pushing it), plus AI Impact (how the AI wave reshapes it), kept deliberately apart · 2026-08-11 01:21:43
Delvantic - Cairn AI
Rich — pass at $105, buyer in the mid-$80s 7/10
UPS is a cash-honest legacy compounder trading 15-20% above what the business currently deserves — wait for the mid-$80s, don't chase the yield.
The cruxWhether operating margin can inflect back above 10% on flat volume; without that, every FV anchor except a stale peak-earnings PE sits below today's $104.72.
Forensic checks Derived mechanically from UPS's filed financials — not from the AI lenses
Liquidity & RunwaySelf-Funding
DilutionShare Count Shrinking
Earnings QualityHigh Earnings Quality
The four lensesswitch a tab for its full read — score + evidence
Company Quality
-17
Solid
edge √Σ 82 · risk √Σ 99 · conf 7/10

UPS still throws off real cash: $4.77B FCF in 2025, OCF/NI of 1.44x, and accruals at -4% of assets - the earnings are cash-backed and mechanically clean (Altman Z 2.95 grey but not alarming). Capital return is disciplined: diluted share count has drifted from 878M to 850M (-0.8% CAGR) with buybacks running 280% of SBC, so per-share economics are being concentrated rather than eroded. Liquid cash of $5.89B is thin against $18.31B net debt, so the balance sheet is a constraint rather than a cushion, but $4-5B annual FCF comfortably services it.

Strengths 3
m55
Consistent FCF generation
FCF of $10.81B / $9.34B / $5.08B / $6.21B / $4.77B across 2021-2025 - lower now but never negative, and OCF/NI 1.44x confirms cash conversion is intact.
m45
Net buyer of own shares
Diluted shares fell from 878M (2021) to 850M (2025); buyback-to-SBC of 280% with SBC only 0.1% of revenue - almost no dilution leak.
m40
Clean earnings quality signals
Accruals -4% of assets, OCF/NI 1.44x, no Beneish flags - reported earnings look real and conservative.
Concerns 4
m65
Margin and profit erosion
Operating margin has compressed every year: 13.2% -> 13.0% -> 10.0% -> 9.3% -> 8.9%. Net income halved from $12.89B (2021) to $5.57B (2025) - a real deterioration in earning power, not a one-off.
m55
Revenue stagnation/decline
Revenue peaked at $100.3B (2022) and has drifted to $88.7B (2025), a ~12% decline over three years - suggests structural volume/price pressure, not just cyclical.
m40
Levered balance sheet
Net debt of $18.31B versus $5.89B liquid cash; cash is only 6.6% of market cap. Serviceable at current FCF but leaves little cushion if margin compression continues.
m30
FCF trending down alongside earnings
FCF has more than halved from $10.81B (2021) to $4.77B (2025), tracking the operating margin slide - the cash engine is weaker than it was.
This is a mature, cash-generative franchise with clean books and shareholder-friendly capital return, but you can see the earning power quietly leaking - op margin has fallen every single year since 2021 and revenue peaked three years ago. The forensic modules flag no accounting mischief, and I believe them; the real question is durability of the moat as parcel economics normalize and the Amazon insourcing works through. It's solidly run and honest, but the trajectory is soft enough that I can't call it strong. Solid, not improving.
Verify before trusting this (5)
  • Whether recent margin compression reflects the Amazon volume glidedown (known strategic choice) versus broader pricing weakness
  • Segment-level margins (US Domestic vs International vs Supply Chain) to see where erosion is concentrated
  • Pension and lease obligations behind the $18B net debt figure
  • Sustainability of the dividend given FCF now barely covers it plus buybacks
  • Labor cost trajectory under the 2023 Teamsters contract
Valuation / Mispricing
-60
Rich
edge √Σ 25 · risk √Σ 94 · conf 7/10
Price $104.72 vs signal-adjusted deserved ~$88 and EPV floor ~$83 - a 15-20% premium, not a discount. attractive below $85.00

The composite FV of $97.69 and the signal-adjusted FV of $88.47 both sit below the $104.72 price, implying -7% to -16% downside before you even stress the assumptions. The DCF pins deserved value at $71.64 and the EPV floor at $82.55 - both meaningfully under the tape. The only anchor supporting the price is the anchored-PE at $164.91, which I discount heavily: it capitalizes a multiple against earnings that have declined every year since 2021, so it is almost certainly extrapolating a peak-earnings/peak-multiple regime that no longer applies.

Cheap signals 2
m20
High earnings quality, no accounting haircut needed
Forensic modules flag no mischief (EQ score 2), so the reported earnings you are capitalizing are real - this supports the EPV floor at $82 as a genuine anchor rather than a mirage.
m15
Shareholder-friendly capital return on a defensive name
Consistent buybacks and dividend on a cash-generative logistics franchise put a soft floor under the equity, but this belongs in deserved value, not in cheapness at $105.
Rich / priced-in 3
m62
Above every non-runaway FV anchor
$104.72 sits above composite FV $97.69, signal-adj FV $88.47, EPV $82.55, and DCF $71.64. Only the PE anchor at $164.91 supports the price and it looks like a peak-earnings extrapolation.
m55
Signal-adjusted downside of ~16%
The e2e synthesis itself labels this Fully Priced with -16% upside to $88.47 - the model already accounts for the quality signal and still says pay less.
m45
Paying full price for a decelerating franchise
Operating margin has compressed four consecutive years and revenue peaked in 2021; the current multiple bakes in a margin recovery that has not shown up in the numbers.
I do not see a mispricing on the cheap side here - if anything the tape is 15% rich to what I think this business deserves. The DCF and EPV both sit in the low-$70s to low-$80s, and the only anchor above price is a PE model I distrust because earnings have been falling. Solid business, fine balance sheet, but I want it in the mid-$80s before I am interested; at $105 I am paying for a margin recovery I have not seen evidence of.
Verify before trusting this (4)
  • Q4 and forward guidance on US Domestic operating margin - is the automation payoff finally showing up?
  • Amazon volume disclosure and remaining insourcing runway
  • Teamsters contract cost cadence through 2025-2026 - already fully absorbed or still ramping?
  • Free cash flow conversion vs GAAP EPS to confirm the anchored-PE is not capitalizing accrual-heavy earnings
General Sentiment
+24
Tailwind
tail √Σ 72 · head √Σ 47 · conf 6/10

The macro backdrop is mildly supportive: a risk-on tape with VIX at 15.5 and indices near highs favors cyclicals and industrials, and UPS at beta 1.04 participates without being whipped around. The 10y at 4.65% is a background drag on all equities but hits this name less than long-duration growth. Net macro pressure on UPS specifically is a light positive.

Tailwinds 3
m55
Fresh earnings beat and raised guide
Q2 revenue above expectations plus a raised 2026 outlook and confirmation that the Amazon volume pullback is done gives the bull narrative a concrete data point. This is the kind of catalyst that pulls analyst revisions higher and reinforces the defensive-compounder framing.
m35
Risk-on tape suits industrials
A +47 risk-on regime with VIX 15.5 and indices near highs is a supportive backdrop for cyclical industrials. At beta 1.04, UPS participates in the tape without being a high-beta lightning rod, so the tailwind is real but modest.
m30
Boring-but-safe bid in uncertain macro
With rate uncertainty and stretched broad-market multiples, capital continues to rotate toward defensive industrial compounders with visible cash flow. UPS fits the profile and benefits from that positioning flow.
Headwinds 2
m40
Amazon-insourcing and Teamsters bear story lingers
The bear narrative around Amazon vertical integration and unionized cost structure is durable and keeps a ceiling on multiple expansion. It is not actively de-rating the stock right now, but it prevents sentiment from running hot even on good prints.
m25
Higher rates cap defensive premium
10y at 4.65% and market PE 26 create a general drag on bond-proxy-ish defensive industrials that trade partly on yield and stability. Not a dominant force, just an ambient press.
Net pressure leans positive but not dramatically. The tape is friendly, the just-reported beat and raise hand the steady-compounder narrative a fresh proof point, and news flow is constructive — that is a genuine tailwind. But this is a moderate-intensity, low-cult story with a durable bear counter-narrative (Amazon, Teamsters) sitting right underneath it, so sentiment cannot run hot. Call it a real but measured Tailwind, the kind that supports the stock rather than propels it.
Verify before trusting this (4)
  • Whether sell-side target revisions actually move up post-print or the raise gets faded
  • Any follow-through commentary on Amazon volume trajectory in coming weeks
  • Teamsters cost cadence updates that could reignite the bear narrative
  • Rotation out of defensives if the risk-on regime deepens into a growth-led melt-up
The market-wide tape + this name's exposure to it (beta / sector / narrative durability). Context on the non-fundamental pressure — not a call on the business or the price. processId: detail-general-sentiment
AI Impact
+26
Mildly favorable - physical network insulated, AI helps cost not price
opp √Σ 82 · thr √Σ 0 · conf 7/10

UPS is hired to physically move a parcel from A to B with a time guarantee; that need and that solution both survive cheap intelligence intact, because the scarce assets are trucks, planes, sort capacity, and route density rather than information processing. AI therefore reaches UPS almost entirely through the cost line and the intermediation layer, not through demand destruction. On cost, the opportunity is genuine and large: labor is the dominant expense, and AI-assisted routing, volume forecasting, dynamic sort staffing, automated customs classification, and self-service support directly reduce hours per piece - this is the Smart-Facility thesis with an intelligence multiplier. On the other side, AI erodes UPS's historical informational advantage in network planning and makes shipper-side optimization software good enough to arbitrage carriers piece by piece, which pressures the monetized unit - price per parcel - and accelerates the shift of UPS from chosen partner to interchangeable capacity. The company is also already losing share while the industry grows, so any AI-enabled cost win must be judged against whether it is handed straight to customers as lower yield.

AI opportunities 6
m55
Underlying Need Persistence
Physical goods must still be moved regardless of how cheap intelligence gets.
m19
Solution Persistence
Parcels will still move by truck and plane, but not necessarily on UPS's network.
m28
Responsibility Transfer
UPS is paid to own delivery liability, customs compliance, and cold-chain integrity.
m44
Scarcity Migration
As software becomes abundant, physical density and air capacity become relatively scarcer.
m12
Data Leverage
Decades of route, address, and delivery-outcome data is genuinely useful but not exclusive.
m22
Entrant Compression
Software got cheap; trucks, planes, unions, and hubs did not.
AI threats 0

None surfaced.

AI cannot disintermediate a truck, but it also cannot fix UPS's real problem - yield - so this is a cost-story name, not an AI-winner name. Exposure is genuinely low-to-moderate at 41 and position only mildly favorable at 54: the physical network is insulated (need persistence 88, scarcity migration 76) while the pressure lands entirely on ai_margin_conversion at 57 with the highest relevance in the sheet, 88. The unlock is a visible operating margin inflection back above 10% on flat volume - that would prove AI-sourced cost is being retained rather than handed to shippers as it plainly was between 2021 and 2025 when margin fell from 13.2% to 8.9%. Watch revenue per piece against cost per piece before anything else; if both fall together, the automation narrative is funding customers, not owners.
Verify before trusting this (8)
  • operating margin inflection above 10%
  • revenue per piece versus cost per piece
  • announced rate increase realization rate
  • capacity utilization in air network
  • facility automation percentage
  • competitor capacity additions
  • revenue per piece by segment
  • surcharge and accessorial revenue
The structural effect of the AI wave on this specific business over the next ~5 years — demand, cost leverage, moat, barriers to entry, position in the AI stack. The reality beneath the AI story, not the story's market pressure (General Sentiment owns that) — and not a call on the business today or the price.
Growth Outlook
not run

This lens hasn't been run for this ticker yet.

The forward growth verdict — is the business itself likely to grow (next 2 quarters / year 1 / years 2–3), judged against its category and against printed expectations. The full horizon ladder + creme renders on the Growth Outlook card above. Not a call on the price (Valuation owns that) or the tape (Sentiment owns that).
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Lenses kept deliberately separate — Company Quality (price-agnostic), Valuation (price-conditional), General Sentiment (non-fundamental macro/narrative pressure), AI Impact (structural ~5yr AI exposure), and Growth Outlook (the forward growth verdict). The scores are not blended. Filing-level items (convertibles, lock-ups, customer concentration) are v2 — see each lens's "verify."
Price Prediction
Lower -9.3% v0.6.0 View full prediction →

When we made this prediction on Aug 11, 2026, UPS was $104.72. We expect it to be $95.00 by Feb 2027, and we consider it great value under $85.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Aug 11, 2026.

Price when predicted$104.72
Our estimate for Feb 2027$95.00-9.3%
Great value below$85.00
Price history shown (6 Months)

Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.

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My Notes personal — only you see this
v1.1.562 · 9b2927c4 · 2026-08-22 16:52:06