UPS Near-Term Upside Potential Limited: Stifel Nicolaus - CNBC
Stifel Nicolaus downgraded United Parcel Service in a research note on Tuesday, saying the company’s upside potential is limited in the near-term due to its impending merger with TNT Express.
The report’s analysts said they were cautious on the merger because large-scale network integrations often begin with more potential benefit than ultimately is realized. Furthermore, they said that “UPS management does not have a stellar track record, in our opinion, navigating sizable integrations as planned … or realizing estimated annual cost-savings benefits.”
Analysts see several risks in the impending merger, such as if “IT/network/labor integration and/or management distraction causes market share losses to competitors and/or margin compression, TNT operating performance does not improve or worsens (or the) European Commission finds merger anti-competitive in one or more areas.”
Stifel Nicolaus downgraded United Parcel Service in a research note on Tuesday, saying the company’s upside potential is limited in the near-term due to its impending merger with TNT Express.
The report’s analysts said they were cautious on the merger because large-scale network integrations often begin with more potential benefit than ultimately is realized. Furthermore, they said that “UPS management does not have a stellar track record, in our opinion, navigating sizable integrations as planned … or realizing estimated annual cost-savings benefits.”
Analysts see several risks in the impending merger, such as if “IT/network/labor integration and/or management distraction causes market share losses to competitors and/or margin compression, TNT operating performance does not improve or worsens (or the) European Commission finds merger anti-competitive in one or more areas.”
