United Parcel Service: Shares Are Now Trading Near Fair Value, Says Deutsche Bank
In a research report sent to investors today, Deutsche Bank analyst Robert Salmon downgraded shares of United Parcel Service (NYSE:UPS) from Buy to Hold rating, as he sees roughly 5.5% upside to his 2015 year-end price target of $116.
Salmon wrote, “We now see a more balanced risk/reward with the stock appreciating 9.5% since earnings. The outperformance has been driven by multiple expansion as investors have looked out to DIM pricing tailwinds and a better peak season. We believe much of the good news is already in the shares with the stock trading at 19.4x our 2015 EPS estimate.”
The analyst continued, “While we continue to be intrigued by the company’s growth opportunities, margins, and free cash flow generation, we believe shares are now trading near fair value and see limited upside potential and just an 8% total return through year-end 2015, which we do not believe justifies a Buy-rating.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Robert Salmon has a total average return of 14.2% and a 100.0% success rate. Salmon is ranked #1404 out of 3412 analysts.