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The Bull Case For United Parcel Service (UPS) Could Change Following Sweeping Cost Cuts And Union Pushback

Simply Wall St·02/14/2026 05:24:30
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  • United Parcel Service’s recent turnaround push has combined stronger-than-expected Q4 2025 results and raised 2026 revenue guidance with plans to cut up to 30,000 jobs and close 24 facilities, largely through voluntary programs, while shifting away from lower-margin Amazon deliveries.
  • This restructuring drive has triggered legal challenges from the Teamsters over the Driver Choice Program and coincides with increased options activity and mixed short interest, underscoring how labor relations and cost cuts are becoming central to the UPS investment story.
  • We’ll now examine how UPS’s aggressive cost-cutting and union pushback reshape the earlier investment narrative around margin improvement and network optimization.

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United Parcel Service Investment Narrative Recap

To own UPS today, you have to believe its massive reset will convert Amazon volume cuts, network consolidation, and automation into steadier margins and cash flows, without permanently damaging service quality. The immediate catalyst is whether 2026 guidance and early cost savings hold up as the job cuts and facility closures roll through the network. The biggest near term risk has clearly shifted toward labor relations, with the Teamsters’ lawsuit and injunction request adding legal and operational uncertainty around those savings.

The most relevant recent development here is the Teamsters’ legal challenge to UPS’s Driver Choice Program, which directly targets how the company achieves its planned reduction of up to 30,000 roles. That dispute sits right on top of the margin and “Network of the Future” catalyst: if courts or contract rulings slow or change the program, the timing and scale of UPS’s expected cost savings from its Amazon pullback and building closures could look very different from what investors had been modeling.

Yet behind UPS’s stronger Q4 2025 and higher 2026 revenue guidance, you should be aware that the unresolved union fight over Driver Choice could still...

Read the full narrative on United Parcel Service (it's free!)

United Parcel Service's narrative projects $94.5 billion revenue and $7.1 billion earnings by 2028. This requires 1.5% yearly revenue growth and about a $1.4 billion earnings increase from $5.7 billion today.

Uncover how United Parcel Service's forecasts yield a $113.18 fair value, a 5% downside to its current price.

Exploring Other Perspectives

UPS 1-Year Stock Price Chart
UPS 1-Year Stock Price Chart

Some of the most optimistic analysts were expecting UPS to reach about US$96.7 billion of revenue and US$8.0 billion of earnings by 2028, but the fresh union and cost cutting tension shows how far actual outcomes can diverge from those projections, so it is worth seeing how different investors weigh that upside against the risk of rising labor and regulatory costs.

Explore 24 other fair value estimates on United Parcel Service - why the stock might be worth as much as 36% more than the current price!

Build Your Own United Parcel Service Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.