UPS: The Path To $300 - Seeking Alpha
Summary
Summary
- After 7 years of stagnation, the recent bounce in UPS is the start of structurally higher Free Cash Flow and not simply a Covid bounce.
- A new CEO, pricing and Capex discipline at both UPS and FedEx, and Covid demand pull-forward are a trifecta of positive catalysts that did not exist one year ago.
- Despite these positive catalysts neither sell-side estimates nor the stock's valuation are pricing in nearly enough improvement in Operating Margin or Free Cash Flow.
- Looking forward UPS has the potential to generate over $11 billion of Free Cash Flow by 2023 implying UPS shares are headed to $300 in the next 1-2 years.
