Here's Why UPS Stock Is Rising and Falling in 2026

3 days ago 4

Lee Samaha, The Motley Fool

Thu, May 7, 2026 astatine 10:53 AM CDT 4 min read

UPS (NYSE: UPS) successful 2026. It's complicated. The banal is fundamentally level connected the twelvemonth truthful far, but that information goes obscurity adjacent explaining the banal oregon the institution successful 2026. April was 1 of the up months, with a 10.6% performance, according to information from S&P Global Market Intelligence. The determination successful April came arsenic investors prepared for the first-quarter net study astatine the extremity of the month, but since then, the banal has declined. Here's why.

UPS's analyzable earnings

Forget astir UPS for a moment, due to the fact that Amazon.com (NASDAQ: AMZN) looms ample whenever investors effort to instrumentality a snapshot of UPS. The crushed is twofold. First, UPS is voluntarily reducing the measurement of deliveries it makes for Amazon, and for bully reason, too. A batch of Amazon-related deliveries are low- oregon adjacent negative-margin for UPS, not slightest due to the fact that they impact deliveries of inefficiently packaged oregon bulky items to hard-to-find residential addresses.

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As such, the program to trim Amazon transportation measurement by 50% from the commencement of 2025 to the mediate of 2026 makes cleanable sense. The voluntary simplification successful measurement is impacting UPS successful galore ways, arsenic Amazon accounted for 11.8% of UPS's full gross successful 2024.

Amazon's interaction connected UPS

First, gross people declines arsenic the "glidedown" takes place. For example, gross was conscionable implicit $91 cardinal successful 2024, past dropped to $88.7 cardinal successful 2025, and adjacent though absorption expects year-over-year maturation to $89.7 cardinal successful 2026 , it inactive represents a diminution from 2024.

Second, the near-term costs of adjusting its transportation web to little Amazon transportation volumes are eroding near-term profitability. For example, UPS launched its "Driver Choice Program" this year, an inaugural that offers drivers the enactment to bargain retired their packages. The purpose was to trim thrust numbers by 7,500. Come the archetypal quarter, the programme was oversubscribed. These costs and others meant that "we had a astir $150 cardinal successful transitional costs successful the archetypal 4th that starts to spell distant arsenic we spell to the 2nd quarter," according to CFO Brian Dykes connected the net call.

Third, Amazon has its ain logistics ambitions, and it precocious launched Amazon Supply Chain Services (ASCS) to replicate the occurrence of its interior proscription services by offering them to outer companies. The menace could beryllium important for UPS, fixed that Amazon tin people small- and medium-sized businesses that already usage Amazon shipping lone partially (Amazon sellers) oregon don't vessel via Amazon astatine all.

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