Baird analysts raised their rating on UPS (NYSE:UPS) from Neutral to Outperform, pointing to a favorable risk/reward ratio and the expectation that the current downtrend is close to concluding. The price target was increased to $170 from $165, leading to a roughly 2% rise in UPS shares on Friday.

The analysts acknowledged that the fourth-quarter results and subsequent estimate adjustments were broadly in line with expectations, indicating continued challenges through the first half of 2024. However, they believe the market is gradually moving past the lowest point of this cycle.

Following a recent decline in stock prices, the analysts see an upgrade to Outperform for UPS as a strategic move, appreciating the risk/reward dynamics at play. They also advise investors to reconsider the long-term potential of UPS, emphasizing the cost-saving measures and productivity gains discussed during the Investor Day on March 26 and noting the company’s enhanced operational efficiency.

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