Morgan Stanley lowered the firm’s price target on UPS (UPS) to $82 from $100 and keeps an Underweight rating on the shares. A Q4 beat was overshadowed by soft FY25 guidance, but “more so” by the announcement that Amazon (AMZN) would be drawing down 50%-plus of its volumes. While this Amazon drawdown is “not a surprise as we believed the contract would be up for renewal in 2025,” the drawdown will be spread over about 18 months, and management “sounded confident on the call,” rather than this announcement potentially “lifting an overhang” on the stock, the “biggest part of the overhang may be yet to come,” the analyst tells investors.
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