T
tuknick
Guest
Here is a copy of a recent analyst report on UPS.
Looks good to me!
United Parcel Service (UPS)
> UPS gaining some momentum; Expect UPS to outpace guidance; Teamster strike
> unlikely; sheet
> > International markets picking up; One of the cleanest balance sheets in
> addition to an off-balance
> > asset; Expect stock to be included in S&P 500
>
> > Recent comments from the company in terms of the economy are that it
> appears the U.S. is bumping along a bottom; however, we feel the U.S. is
> doing better than that. Asia has picked up and Europe remains strong for
the
> company (international represents about 30% of business for UPS).
Management
> felt no indications of pricing becoming irrational in the ground market.
> Management's guidance for 2Q:02 EPS remains in the $0.50 - 0.55 range;
> however, we are keeping our $0.56 estimate. We recognize that our 2Q:02
> forecast is ahead of the company's guidance, but we suspect that UPS will
> outpace its guidance by about at least a penny or so.
> >
> > Management and the Teamsters have reviewed all economic based issues,
and
> at this point they are in the stages of discussing non-economic issues
> (NOTE: UPS is the largest employer of Teamsters). While the stock has
> already been strong in the last two weeks as a result of progress with the
> Teamsters, we believe any positive developments that unfold within the
next
> 2 - 3 weeks could help to push the stock up even further in our opinion.
> >
> > The company is among the only eight AAA-rated companies among the
> industrials. For 2002, if our forecasts are correct, we believe the
company
> has the means to generate sizable amounts of cash and achieve a net debt
to
> net debt + equity ratio of 9% and a debt ratio of 20%. As the company
> continues to generate sizable amounts of free cash flow going forward, we
> believe the company's net debt to net debt + equity could get as low as
2%,
> with a debt ratio of 17% by 2003. This is not even accounting for the IRS
> settlement. The timing and amount collectable of UPS's $1.8 billion IRS
tax
> settlement remains unresolved. We are aware that it is concurrently being
> handled in court while ongoing settlement discussions are also occurring
> with the IRS. In our opinion, a settlement should occur soon.
> >
> > With regard to the UPS and the S&P 500, increasing trading volume and
> liquidity remain some of the final barriers towards inclusion into the S&P
> 500 in our opinion. At the current level of average daily trading volume
for
> the past month of 1.7 million shares, we calculate that the implied number
> of days to fill all buy orders from index funds for the stock would be
29 -
> 41 days, following an adjustment for the 30 million share shelf
> registration. We would not be surprised to see S&P 500 inclusion happen
this
> year.
Looks good to me!
United Parcel Service (UPS)
> UPS gaining some momentum; Expect UPS to outpace guidance; Teamster strike
> unlikely; sheet
> > International markets picking up; One of the cleanest balance sheets in
> addition to an off-balance
> > asset; Expect stock to be included in S&P 500
>
> > Recent comments from the company in terms of the economy are that it
> appears the U.S. is bumping along a bottom; however, we feel the U.S. is
> doing better than that. Asia has picked up and Europe remains strong for
the
> company (international represents about 30% of business for UPS).
Management
> felt no indications of pricing becoming irrational in the ground market.
> Management's guidance for 2Q:02 EPS remains in the $0.50 - 0.55 range;
> however, we are keeping our $0.56 estimate. We recognize that our 2Q:02
> forecast is ahead of the company's guidance, but we suspect that UPS will
> outpace its guidance by about at least a penny or so.
> >
> > Management and the Teamsters have reviewed all economic based issues,
and
> at this point they are in the stages of discussing non-economic issues
> (NOTE: UPS is the largest employer of Teamsters). While the stock has
> already been strong in the last two weeks as a result of progress with the
> Teamsters, we believe any positive developments that unfold within the
next
> 2 - 3 weeks could help to push the stock up even further in our opinion.
> >
> > The company is among the only eight AAA-rated companies among the
> industrials. For 2002, if our forecasts are correct, we believe the
company
> has the means to generate sizable amounts of cash and achieve a net debt
to
> net debt + equity ratio of 9% and a debt ratio of 20%. As the company
> continues to generate sizable amounts of free cash flow going forward, we
> believe the company's net debt to net debt + equity could get as low as
2%,
> with a debt ratio of 17% by 2003. This is not even accounting for the IRS
> settlement. The timing and amount collectable of UPS's $1.8 billion IRS
tax
> settlement remains unresolved. We are aware that it is concurrently being
> handled in court while ongoing settlement discussions are also occurring
> with the IRS. In our opinion, a settlement should occur soon.
> >
> > With regard to the UPS and the S&P 500, increasing trading volume and
> liquidity remain some of the final barriers towards inclusion into the S&P
> 500 in our opinion. At the current level of average daily trading volume
for
> the past month of 1.7 million shares, we calculate that the implied number
> of days to fill all buy orders from index funds for the stock would be
29 -
> 41 days, following an adjustment for the 30 million share shelf
> registration. We would not be surprised to see S&P 500 inclusion happen
this
> year.
