Evercore ISI reaffirmed an "In Line" rating on UPS (NYSE:UPS) and kept its price target at $113.00 after the company released fourth-quarter 2025 results that beat several key expectations. The price target sits modestly above the stock's quoted price of $106.97 and is roughly consistent with InvestingPro's Fair Value view, which flags the shares as slightly undervalued.
UPS reported adjusted earnings per share of $2.38 for the quarter. That figure excludes one-time items tied to MD-11 fleet write-offs and transformation costs, and it topped both Evercore's projection and the average Street estimate of $2.20. Across the trailing twelve months the company delivered diluted EPS of $6.47; analysts anticipate full-year 2025 EPS of $6.95.
Top-line results also outperformed expectations. Consolidated revenue for the quarter was $24.479 billion, roughly $500 million higher than analysts had modeled. Adjusted EBIT was $2.890 billion, beating forecasts by about $200 million, and the consolidated operating margin came in at 11.8% - 60 basis points ahead of Evercore's prior estimate. UPS' market capitalization stood at $90.75 billion following the release.
Segment-level performance contributed to the outperformance. U.S. Domestic adjusted operating margin reached 10.2%, surpassing forecasts by 60 basis points. International and Supply Chain Solutions also exceeded expectations, with International beating EBIT estimates by $29-38 million and Supply Chain Solutions topping EBIT projections by approximately $30 million. InvestingPro data referenced by analysts shows UPS operates with a moderate debt load and a current ratio of 1.3, indicating a degree of liquidity that supports continued operational flexibility.
For full-year 2026, UPS issued guidance of roughly $89.7 billion in consolidated revenue and a 9.6% consolidated operating margin. Evercore noted that the raised revenue guidance was driven principally by yield improvements, but the margin outlook came in below Street estimates - a divergence that the firm highlighted as a concern around cost alignment. The company continues to return cash to shareholders, offering a 6.13% dividend yield and maintaining dividend payments for 27 consecutive years.
Outside of the earnings release and guidance, analysts remain divided. Stifel, citing progress in transformation savings, yield discipline, and cost controls demonstrated in an earlier third-quarter 2025 report, reiterated a Buy rating with a $112.00 price target. Raymond James kept a Strong Buy stance with a $275.00 price target. By contrast, BNP Paribas Exane lowered its view to Underperform and cut its price target to $85.00, pointing to market share pressures attributed in part to a slowdown in Amazon volumes.
Operational and safety issues also remain under scrutiny. The National Transportation Safety Board reported that a UPS MD-11 cargo jet crash in Kentucky involved a component with fatigue cracks that Boeing had previously identified in 2011. The investigation is ongoing following the crash that resulted in the loss of 15 lives, and UPS has recognized related one-time charges tied to MD-11 fleet write-offs in its results.
The combination of a quarterly beat, raised revenue guidance, and below-consensus margin targets paints a mixed picture: revenue momentum supported by yield while cost execution and alignment are areas analysts are watching closely. InvestingPro's Pro Research Report on UPS includes additional insights and analysis, including eight further data points available through its Pro service.
Market context and takeaway
UPS' quarter shows tangible top-line resilience and margin strength versus some forecasts, but guidance that points to a lower consolidated operating margin for 2026 than analysts expected creates questions about near-term cost control. The stock sits near Evercore's target and InvestingPro's fair value estimate, leaving upside potential as modest unless margin guidance—or execution against it—improves materially.