Buffett Brain · Research note
Score updated 29 Oct 2026 · analysis from 26 Jul 2026
UPS· Industrials
United Parcel Service
UPS's declining revenue and low margins raise significant concerns about its long-term durability and competitive positioning in the logistics sector.
Buffett fit
Partial fit
Owner
37
Durability
45
Management
41
Price
61
Score updated 29 Oct 2026 · analysis from 26 Jul 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned 100% of UPS, I'd focus on stabilizing revenue, which has declined at a CAGR of -2.28% over the last five years.
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UPS's long-term durability is questionable, especially given its -18.34% EPS CAGR over the last five years.
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Management has maintained a share count CAGR of -0.72% and a yield of 1.71%, indicating some discipline in .
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UPS's current earnings yield of 5.8% is below my target of 8-10%, indicating an unfavorable valuation.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 5y average of 19.9% indicates strong historical profitability despite current challenges.
- 2 of $4.77 billion shows that the company is still generating cash, albeit under pressure.
- 3Dividend yield of 6.16% provides a return to shareholders, which is attractive in the current market environment.
- 4Share count has decreased marginally at -0.72% CAGR, reflecting some shareholder return discipline.
Concerns
5- 1Revenue CAGR of -2.28% signals declining business performance and potential loss of market share.
- 2 of 18.1% is significantly below the sector top-quintile cutoff of 43.4%, indicating pricing pressure.
- 3 of 8.6% is below the sector's top-quintile cutoff of 17.8%, raising concerns about profitability.
- 4Net margin of 5.9% is below the sector's top-quintile cutoff of 13.8%, indicating inefficiencies.
Price history
$106-50.5%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
UPS operates in integrated freight and logistics, generating revenue through domestic and international package delivery. The U.S. Domestic Package segment accounts for a significant portion of revenue, providing time-definite delivery services. The company generated $88.64 billion in revenue TTM, but its declining EPS CAGR of -18.34% indicates challenges in sustaining profitability. Unit economics are under pressure due to competitive pricing and rising operational costs.
What other investors would say
The same company, judged by three other documented playbooks.
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