The world's leading express carrier and package delivery company, United Parcel Service, Inc. UPS, recently signed an Air Cargo Service agreement with Cargojet Inc. In this 10-year deal United Parcel has the option to renew the agreement twice for a three-year contract term.
In 2003, both the companies had entered into a contract to deliver domestic overnight air cargo services in Canada. However, this new agreement replaces the previous agreement.
Recently, United Parcel closed the acquisition of Coyote Logistics for $1.8 billion, through a cash and debt transaction. This buyout is expected to generate operating synergies of $100–$150 million next year. Moreover, we believe that the application of Coyote Logistics’ analytical tool will certainly help the packaging company to manage order overloads.
In the second quarter of 2015, United Parcel’s earnings outpaced the Zacks Consensus Estimate supported primarily by strong international growth. Meanhwile, the company delivered 1.1 billion packages in the second quarter, up 2.1% year over year.
We believe that a booming health care segment, healthy shipments and yield growth as well as productivity improvements will continue to drive growth at United Parcel. Moreover, the company’s strategic investments, technology-backed operations and enhanced global network will strengthen its market position and safeguard the company against rivals.
Currently, United Parcel carries a Zacks Rank #3 (Hold). Better-ranked stocks in the related space are Atlas Air Worldwide Holdings, Inc. AAWW, Alaska Air Group, Inc. ALK and Allegiant Travel Company ALGT. Al three companies carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment