UPS (NYSE: UPS) consistently appears in value-stock investors’ filters.
After all, who doesn’t like the sound of a blue chip stock yielding 6.4% and trading at just 14.3 times 2026 earnings expectations?
In addition, there’s an attractive strategic transformation underway that supports long-term margin improvement as management repurposes its network for higher-margin deliveries in targeted end markets. It’s a compelling mix, but there are some concerns that investors need to address before buying the stock. UPS strategy The company is transforming away from chasing volume growth and toward higher-margin end markets such as small- and medium-sized businesses (SMBs), healthcare, and business-to-business (B2B) e-commerce deliveries.
This involves the so-called Amazon.com (NASDAQ: AMZN) “glide down,” whereby UPS reduced its Amazon delivery volume by 50% from the start of 2025 to the middle of 2026. At the same time, it’s investing in technology, notably automation and smart facilities, to improve productivity and operate a leaner, more profitable network. Everything points to a long-term future with higher margins, and the bullish case for the stock sees UPS emerging from the glide-down in 2026 (after incurring upfront, temporary costs associated with reducing its labor force by 78,000 and closing 150 buildings) into a higher-margin future.