Breakdown for United Parcel Service (UPS) in the Charts?

While many stocks are trending higher in 2021, United Parcel Service Inc. (UPS) is trading lower and is approaching a key support level.  If this level is broken, a breakdown could ensue…

United Parcel Service, Inc. (UPS) is the world’s largest parcel delivery company. It manages a massive fleet of more than 500 planes and 100,000 vehicles, along with many hundreds of sorting facilities, to deliver an average of about 22 million packages per day to residences and businesses across the globe.

UPS is benefiting from a meaningful increase in home deliveries due to the coronavirus pandemic, as the need for door-to-door delivery of essential products has risen. Even with the rollout of the vaccine, e-commerce demand is likely to be strong for some time. UPS should also benefit from the distribution of the coronavirus vaccines.

As of the end of the last quarter, UPS had $9.2 billion in cash, slightly up from the previous quarter. Long-term debt was $25.8 billion, but short-term debt was only $2.4 billion. The company also has a solid return on invested capital of 15%.

UPS has a stable history of sales growth, up an average of 6.6% over the past five years. Earnings are expected to grow 35.7% next quarter, and 10.2% next year. Its stock has a trailing P/E of 30.15 and a forward P/E of 18.21.

While UPS stock is up 39% over the past year, it has shown bearish momentum over the near-term. This has led to a “Neutral” rating in our POWR Ratings system, and is reflected in the chart below. 

Take a look at the 1-year chart of UPS below with added notations…

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