Baird upgrades UPS on share pullback, exiting of cycle trough

Baird upgraded UPS to Outperform from Neutral with a price target of $170, up from $165. While transportation trends will likely remain challenging through the first half of 2024, “we are slowly exiting the trough of this cycle,” the analyst tells investors in a research note. The firm says its top ideas reflect a mix of the earliest-cycle exposure, company-specific drivers, and discounted valuations. Consistent with this view and following the most recent pullback, Baird are upgraded UPS and likes the stock’s risk/reward. Investor focus should return to the company’s longer-term potential given the cost savings and productivity gains as outlined at the investor day, coupled with improving execution, contends the firm.