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• Amazon has launched Amazon Supply Chain Services, putting it in direct competition with United Parcel Service (NYSE:UPS) in global logistics.

• UPS is accelerating its exit from lower margin Amazon delivery volumes following this development.

• The company is planning significant job cuts and putting more focus on its healthcare logistics operations.

UPS is one of the largest parcel delivery and logistics companies, and Amazon moving further into end to end logistics changes the competitive picture for the sector. Amazon’s new supply chain offering brings another large scale operator into areas where UPS has long been a key provider. At the same time, UPS is putting more attention on healthcare logistics, which can require more specialized services and infrastructure.

For you as an investor, the shift away from lower margin Amazon volumes and toward healthcare logistics changes both the risk profile and potential drivers of value for NYSE:UPS. The planned workforce reductions and business mix changes indicate that management is willing to reshape the company’s cost base and focus. This could influence how investors think about UPS’s earnings resilience and growth options over time.

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2 things going right for United Parcel Service that this headline doesn’t cover.

Quick Assessment

• ⚖️ Price vs Analyst Target: UPS trades at US$98.44 versus an analyst consensus of US$112.88, roughly 13% below the target range midpoint.

• ✅ Simply Wall St Valuation: Shares are described as trading about 40.6% below an estimated fair value, which points to a sizeable valuation gap.

• ❌ Recent Momentum: The stock is down 3.2% over the last 30 days, so price action has been weak into this news.

There is only one way to know the right time to buy, sell or hold United Parcel Service. Head to Simply Wall St’s company report for the latest analysis of United Parcel Service’s Fair Value.

Key Considerations

• 📊 Amazon entering global logistics while UPS exits lower margin Amazon work and focuses more on healthcare logistics changes where UPS may earn its returns.

• 📊 It may be useful to monitor how healthcare revenue, margins and any restructuring costs from job cuts appear in future earnings and cash flows.

• ⚠️ With one flagged major risk that the 6.66% dividend is not well covered and another that debt levels are high, pressure from new competition could be particularly relevant for income focused investors.