SurePost loss ‘another reason to avoid’ UPS, says JPMorgan

JPMorgan analyst Brian Ossenbeck says UPS (UPS) underperformed the broader industrials group as well as peer FedEx (FDX) on Friday as the market digested the implications of UPS failing to reach an agreement for the U.S. Postal Service to handle final mile delivery of the company’s SurePost product. Investor awareness of the SurePost transition started off low but increased throughout the day on Friday, culminating in an official announcement by UPS that SurePost was in-sourced effective January 1, 2025, the analyst tells investors in a research note. JPMorgan believes the SurePost transition “adds another reason to avoid” UPS on the Q4 print and 2025 outlook. The sell-side has “seemingly overlooked this risk, while some competitors also look favorably on the shares into 2025,”