UPS
United Parcel Service, Inc.
$99.22
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 0.8% above fair value
You pay
$99.22
Bear
$78.72
Fair
$98.40
Bull
$118.08
Bear
$78.72
-20.7%
$6.56 × 12x P/E
Fair
$98.40
-0.8%
$6.56 × 15x P/E
Bull
$118.08
+19.0%
$6.56 × 18x P/E
Adjust Assumptions
15.0x
6.56$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
15.1x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (45 analysts)
$119.00
Divergence from AlphaVal
17%
Summary
Applying a 15x P/E to adjusted EPS of $6.56, the base-case value is $98.40 per share. DDM cross-check: $143.83.
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: $143.83 (above our primary estimate by 46%). 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