UPS Stock Got Dinged This Week. Here’s Why It’s a Buy Now.

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UPS Stock Got Dinged This Week. Here’s Why It’s a Buy Now. - Barron's

United Parcel Service stock is still a buy, even after this past week’s disappointing investor event. The world is a very different place that it was a few years ago. That should help the company’s business—and its price/earnings multiple.

UPS met with investors Wednesday. Expectations were high. Shares were up 25% for 2021 and up 90% over the past 12 months. UPS failed to live up to them, though. Investors wanted more aggressive cost cutting, earnings growth projections, and share-repurchase plans. Shares dropped 4.1% Wednesday and were down 3.5% for the week.

Investors are being a little too short-term-focused. Over the past three years, the shipping giant’s operating profit margins have fallen. That’s limited its earnings growth to roughly 5% a year on average. Parcel shipping was a tough business.
 
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