UPS: Approaching Undervalued Territory - Seeking Alpha United Parcel Service has an excellent combination of strong free cash flow generation and low financial leverage. We expect the firm's free cash flow margin to average about 8.9% in coming years. Total debt-to- EBITDA was 0.9 last year, while debt-to-book capitalization stood at 57.6%. The firm's share price performance has trailed that of the market during the past quarter. However, it is trading within our fair value estimate range, so we don't view such activity as alarming. We think UPS' fair value is $72 per share, which represents a price-to-earnings (P/E) ratio of about 20.7 times last year's earnings and an implied EV/EBITDA multiple of about 6.9 times last year's EBITDA.