The new target implies upside of roughly 20%. "UPS is making substantial investments in 2023," Poliniak-Cusic said in a note to clients Friday. "In 2024 not only should those investment headwinds fade, but they should generate incremental profit." UPS is expected later this year to announce cost savings plans.
The firm estimates that receding costs can bolster the company's bottom line by as much as $2.30 per share through 2024. A "placeholder" $1 billion headwind due to labor contact overhang has been priced in, though she noted that could change. And despite earnings growth largely being a 2024 story for the company, Poliniak-Cusic said the company could see upside earlier. Still, there are some potential challenges to that story.
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