Okay besties, UPS just delivered a beat — and I mean that literally.
Let’s talk about United Parcel Service (UPS), because the stock popped nearly 5.8% on Oct. 27 after the shipping giant dropped its third-quarter earnings report, and honestly? The numbers deserve the confetti. 💰
Here’s the tea: UPS reported adjusted earnings per share of $1.69, which beat Wall Street’s consensus by $0.06. Revenue came in at $22.9 billion, topping expectations by over $600 million. And the girlies who love a raise got one — UPS lifted its full-year outlook to $92.6 billion in total revenue and roughly $8.75 billion in adjusted operating profit. That’s up from prior guidance of $91.2 billion and $8.65 billion, respectively.
So the big question you’re probably asking (because I get this in my DMs constantly): is this stock actually a buy right now? Let’s break it down like we’re texting.
The turnaround is actually turning around
Think of UPS like a friend who did a full life overhaul — Marie Kondo’d her budget, cut out the energy drains, and started charging what she’s actually worth. That’s essentially what’s happening here.
Back in late 2024, UPS launched a turnaround plan called “Efficiency Reimagined.” The focus? Cutting costs, leaning into automation, and exiting low-margin businesses in favor of higher-performing ones. Translation: stop doing a ton of work for tiny profits and redirect that energy toward the money-makers.
To do that, UPS cut 48,000 jobs in 2025 and another 30,000 earlier this year, while also closing many of its facilities. It also significantly reduced the shipping volume it does for Amazon — because even though Amazon is huge, many of those packages are low-margin. It’s like taking a high-paying client over a busy one who nickel-and-dimes you. Volume means nothing if profit doesn’t follow, and I tell my coaching clients this constantly: revenue is vanity, profit is sanity.
So where is UPS focusing now? Businesses with better margins: healthcare, small- to medium-sized businesses willing to pay higher rates, business-to-business shipping, and complex industrial sectors like data centers. The company also recently announced a new global operating model — a core standardized structure across all its markets, while still giving teams flexibility to adapt to local needs.
This is why I tell my coaching clients that when a company shows discipline about where its money goes, that’s a green flag. UPS CEO Carol Tomé said it best on the earnings call: “These results show that our strategy is working. We’re driving more premium growth, improving revenue quality and mix, and creating greater operating leverage through a more efficient network. All of this is strengthening the underlying performance of our business.”
And the segment numbers back her up. In the quarter, UPS’s U.S. domestic business grew revenue 4.5% year over year with an operating margin of 6.1%. The international segment grew revenue 7.1% with a much richer operating margin of 14.9%. The smallest segment, supply chain logistics, grew revenue by over 18% and hit an operating margin of 3.1% — 9% on an adjusted basis.
The data center angle is low-key fascinating
Here’s a detail I love: UPS is riding the data center boom by shipping critical software — think chips — that are often time-sensitive and sometimes require special care. On the earnings call, Tomé sized UPS’s data center logistics opportunity at $15 billion alone. That’s not small change, friends. When everyone’s building AI infrastructure, someone has to get the sensitive, expensive components there on time — and UPS is positioning itself to be that someone.
So… is it a buy?
Wall Street seems to think the momentum is real. Truist analyst Lucas Servera raised his price target by $5 to $120 per share and maintained a buy rating, noting that the recent results and management’s comments give him confidence UPS can improve revenue, keep making productivity gains, and expand margins next year.
Here’s what I’d do: I’d look at the full picture — fundamentals, valuation, AND the income side — because that’s where this stock gets genuinely interesting for us long-term wealth builders.
First, with management having executed much of the turnaround already, UPS’s valuation has improved. And if the company keeps boosting margins, the stock can continue moving higher over the long term. We’re not buying a finished story — we’re buying the chapters still being written.
Second — and this is the part that makes my dividend-loving heart sing — UPS has a trailing dividend yield of 6.25%. That’s compelling, besties. And here’s the sustainability check I always run: projected dividends this year of $5.4 billion are covered by expected adjusted free cash flow of $6.1 billion. The dividend isn’t being paid out of hopes and vibes — it’s covered by actual cash flow.
Even better? UPS hasn’t cut its dividend since going public in 1999. That’s a long track record of commitment, and management is likely to make every possible effort to keep that streak alive.
For all of these reasons, I think investors can buy the stock right now.
A quick reminder from me to you: no single earnings report is a guarantee, and any stock — even one with a nearly 30-year dividend streak — should be part of a diversified plan that fits YOUR goals and risk tolerance. But if you’ve been wanting to dip a toe into dividend-paying, established companies with a real turnaround story, this is the kind of setup worth studying. Look at the margins, check the cash flow, understand what you own. That’s how confident investing is built — not on hype, but on homework. ✨
If this breakdown helped you finally understand what to look for in a stock (or you want help building a portfolio that pays you back), slide into my DMs or join my mailing list — let’s get you investing smarter, starting today.
