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<blockquote data-quote="moreluck" data-source="post: 286352" data-attributes="member: 1246"><p>$80 Target on UPS Shares</p><p>Friday, January 04, 2008; Posted: 07:10 AM</p><p>Jan 04, 2008 (Zacks _Investment_</p><p>Research via COMTEX) -- -- Advising investors to</p><p>accumulate the name, Zacks senior service industry analyst Ann H. Heffron, CFA</p><p>explains her bullish viewpoint about United Parcel Service, Inc. (UPS), as well</p><p>as the reasons as to why the future looks bright for the delivery company:'We</p><p>are continuing our Buy on United Parcel Service, Inc., as well as our $80</p><p>target price as we continue to believe the stock is undervalued. UPS is</p><p>expected to report fourth quarter earnings in late January. 'We are maintaining our</p><p>2007 EPS estimate at $4.20, a penny above the high-end of the company</p><p>guidance that is calling for a 7-9% gain to $4.13-$4.19, as well as our recently</p><p>reduced 2008 estimate at $4.50. While the weaker US economy, slowing US volume</p><p>growth, and higher interest expense related to a $6.1 billion pension payment</p><p>will be earnings drags, rate hikes, expansion into China, recent acquisitions</p><p>and share repurchases should propel EPS growth. 'UPS reported third quarter</p><p>EPS of $1.05. Excellent international results and improved supply chain and</p><p>freight managed to offset challenging conditions in US small packages. We</p><p>believe the dividend is safe. At its current price, UPS is trading at a 7%</p><p>premium to the industry median P/E (versus a 4% premium at the time of our last</p><p>report on October 23, 2007), based on 2008 consensus estimated earnings. 'It is</p><p>trading at substantial premiums to the group based on price/sales and</p><p>price/book value. While UPSs projected 5-year earnings growth rate is below the</p><p>median of its peer group, its operating margin, dividend yield, and ROE are</p><p>significantly higher than all of its peers. Superior operating efficiency, strength, and ROE justify a premium valuation to the peer group. Therefore, we</p><p>expect valuation to expand from currents levels and rate the shares as Buy. Our</p><p>price target is $80, based on roughly 17 1/2X our 2008 EPS estimate of</p><p>$4.50, representing a 20% premium to the peer group.</p></blockquote><p></p>
[QUOTE="moreluck, post: 286352, member: 1246"] $80 Target on UPS Shares Friday, January 04, 2008; Posted: 07:10 AM Jan 04, 2008 (Zacks _Investment_ Research via COMTEX) -- -- Advising investors to accumulate the name, Zacks senior service industry analyst Ann H. Heffron, CFA explains her bullish viewpoint about United Parcel Service, Inc. (UPS), as well as the reasons as to why the future looks bright for the delivery company:'We are continuing our Buy on United Parcel Service, Inc., as well as our $80 target price as we continue to believe the stock is undervalued. UPS is expected to report fourth quarter earnings in late January. 'We are maintaining our 2007 EPS estimate at $4.20, a penny above the high-end of the company guidance that is calling for a 7-9% gain to $4.13-$4.19, as well as our recently reduced 2008 estimate at $4.50. While the weaker US economy, slowing US volume growth, and higher interest expense related to a $6.1 billion pension payment will be earnings drags, rate hikes, expansion into China, recent acquisitions and share repurchases should propel EPS growth. 'UPS reported third quarter EPS of $1.05. Excellent international results and improved supply chain and freight managed to offset challenging conditions in US small packages. We believe the dividend is safe. At its current price, UPS is trading at a 7% premium to the industry median P/E (versus a 4% premium at the time of our last report on October 23, 2007), based on 2008 consensus estimated earnings. 'It is trading at substantial premiums to the group based on price/sales and price/book value. While UPSs projected 5-year earnings growth rate is below the median of its peer group, its operating margin, dividend yield, and ROE are significantly higher than all of its peers. Superior operating efficiency, strength, and ROE justify a premium valuation to the peer group. Therefore, we expect valuation to expand from currents levels and rate the shares as Buy. Our price target is $80, based on roughly 17 1/2X our 2008 EPS estimate of $4.50, representing a 20% premium to the peer group. [/QUOTE]
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