FedEx and UPS Could Benefit From Higher Postal Prices. Trade Might Get in the Way.

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FedEx and UPS Could Benefit From Higher Postal Prices. Trade Might Get in the Way. - Barron's

The U.S. Postal Service is asking for an average 5.4% increase for its express-shipping products in its proposed 2020 price increases submitted Wednesday. That is a bit of good news for parcel shippers such as United Parcel Service and FedEx, which might cheer the tailwind to industry pricing.

J.P. Morgan, however, thinks investors should keep higher pricing in perspective. “We expect a muted reaction from [the parcel shippers],” analyst Brian Ossenbeck wrote in a Thursday research report, saying that price increases “weren’t another step-change like 2019.”

The increase is healthy, but lags behind last year’s request of about 7.3%, according to data from Stamps.com (ticker: STMP).
 
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