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UPS Ends Estafeta Deal as BMO Downgrades Stock on Weak B2B Outlook

Management reiterates cost-cut targets alongside planned capex as shares lag.

Overview

  • UPS terminated its planned acquisition of Estafeta after not meeting all closing conditions and provided no specifics on what fell short.
  • BMO Capital Markets lowered its rating to Hold from Buy and cut the price target to $96 from $125, pointing to a lack of B2B demand recovery and recession risk.
  • UPS maintained FY2025 guidance for approximately $3.5 billion in capital expenditures and about $3.5 billion in expense reductions tied to network reconfiguration and Efficiency Reimagined.
  • The company highlighted Q2 results as evidence of solid execution in a complex environment and said its strategic initiatives remain on track.
  • Reporting notes the stock trades near a 52-week low, with the dividend yield cited at roughly 7.8%.