UPS
United Parcel Service, Inc.
$114.30
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 5.9% above fair value
You pay
$114.30
Bear
$86.32
Fair
$107.89
Bull
$129.47
Bear
$86.32
-24.5%
$6.98 × 12x P/E
Fair
$107.89
-5.6%
$6.98 × 15x P/E
Bull
$129.47
+13.3%
$6.98 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
16.4x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $115.38 from 45 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $107.89 per share.
Warnings
The company pays out 100% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $250.75 (above our primary estimate by 140%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples