Time to Think Differently About Investing in UPS and FedEx Stock?

cheryl

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Time to Think Differently About Investing in UPS and FedEx Stock? - Fox Business

Has the investment thesis changed?

FedEx and UPS are proactively taking measures to improve profitability Opens a New Window. (dimensional-weight pricing, adjusted oversize package surcharges, and so on), but it's proving harder than anticipated to grow margin with e-commerce deliveries. In a nutshell, we know capital expenditures are likely to go up, but we can't be clear on whether FedEx and UPS have a handle on increasing profitability with e-commerce deliveries.

All told, investors should feel a little less comfortable holding UPS and FedEx, particularly at these valuation levels. E-commerce growth is creating challenges, and it's not clear yet that both companies are overcoming them in terms of margin and cash flow generation.
 
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