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For almost a decade, commercial-fleet managers have acknowledged that electric truck are much cheaper to run per mile than the diesel equivalents they now use.
But justifying the purchase of electric trucks has been a challenge because their upfront costs have been considerably higher.
That may now have changed, according to no less a fleet operator than United Parcel Service.
The Analyst
Stifel’s David Ross upgraded UPS’ stock rating from Hold to Buy with a price target lowered from $127 to $121.
The Thesis
Investors have valid reasons to look at UPS’ capital expenditure guidance and say “there goes my cash!” Ross said in a Tuesday note.
“And that’s true — there should not be too much excess cash above the amount needed to cover the dividend [over] the next couple of years,” the analyst said. “But just as the stock was too high at $132, we believe it’s now too low [at] $106 and will gravitate back up to the middle of that range this year.”
UPS investors have concerns with the Teamsters contract that expires at the end of July, but Stifel believes an agreement will be reached, avoiding a strike, the analyst said.
The company, which bases its UPS Airlines division in Louisville, has two projects in the works. The first replaces dials and monitors (cathode ray tube, or CRT, monitors —think of old tube TVs) in Boeing 757 and 767 aircraft with larger flat-panel display systems. The second project, which is further off, includes a bevy of aircraft upgrades to the company’s Airbus A300 fleet. Both projects aim to enhance the efficiency and safety of the planes while extending the life of the fleet.
Inside EDGE: the shipping giant’s ambitious, tech-driven bid to keep Amazon and others at bay.
UPS workers make dozens of decisions every day, and the wrong ones—from placing a box on the wrong conveyor belt inside a processing facility to loading it onto the incorrect delivery vehicle—could keep you from getting your packages on time.
Labor disputes that normally are kept quiet during negotiations are seeing the light of day.
The Teamsters union and United Parcel Service Inc. (NYSE: UPS) are in the midst of negotiating a new national master contract, which will cover about 250,000 workers. Normally, a negotiation such as this one takes place behind closed doors, but this time around news is getting out.
Multiple news sources have reported that Teamsters want UPS to eliminate late-night deliveries, increase job security, create new full-time jobs and offer raises to employees.