Bank of America cuts UPS price target to $108 on lower package volumes

Bank of America cuts UPS price target to $108 on lower package volumes

Mon, September 21, 2026 at 8:15 PM GMT+3 2 min read

• BAC -3.04%
• UPS +1.18%

Bank of America (BofA) has reiterated its 'Neutral' rating on United Parcel Service Inc (NYSE:UPS) and cut its price target to $108 from $115, citing weaker domestic package volumes and lower earnings expectations.

The broker lowered its 2026 revenue estimate to $91.3 billion from $92.5 billion after a sharp decline in Amazon package volumes at the end of the second quarter, which it said was more abrupt than expected.

BofA expects UPS to report third-quarter 2026 revenue of $22.4 billion, down from its previous estimate of $23.2 billion, while its full-year forecast remains slightly above UPS's own $91.2 billion target because of higher fuel surcharges.

The broker maintained its second-quarter domestic operating margin forecast at 7% and its international operating margin forecast at 13.5%.

BofA cut its earnings per share estimates for the second quarter, 2026 and 2027 by 4%, 2% and 2%, respectively, to $1.65, $7.10 and $8.

The reductions were driven primarily by expectations for domestic package volumes to decline by a mid-single-digit percentage in the second half of 2026, reflecting the sharper-than-expected drop in Amazon volumes.

The broker said it had previously expected Amazon's reduction in UPS volumes to be distributed more evenly through the second quarter, rather than falling sharply at the end of the period.

The bank also raised its forecast for UPS's below-the-line expenses to $191 million from $161 million after the company made a large cash payment to Teamster drivers under an agreement covering about 7,500 separations.

The payment reduced UPS's cash balance and contributed to the broker's lower earnings expectations, according to BofA.

The broker based its revised $108 price target on 13.5 times its 2027 earnings estimate, compared with 14 times previously, putting its valuation multiple slightly below UPS's historical 14 to 20 times range.

BofA said UPS could have upside potential as it cuts costs to adjust to lost volumes, while the company is targeting a significant improvement in second-half 2026 results as it moves beyond the decline in package volumes.